Posted on 01/08/2002 5:05:37 AM PST by Stand Watch Listen
The Associated Press, careful not to insert into its coverage any political prejudice – let alone factual errors based on a one-sided embrace of command-and-control economic theory discredited since the days of Il Duce – filed a story out of Sacramento last week on California's move to increase its minimum wage, which now becomes the second highest in the nation.
"Thousands of California's hotel, restaurant and store employees got a late Christmas present on New Year's Day," led off AP staffer Jim Wasserman. "It's an 8 percent raise."
Of course, Mr. Wasserman could just as accurately have reported that the Grinch will now pay a late visit to thousands of California's hotel, restaurant and store employees, who will likely be laid off by employers who can't afford to give them that 8 percent raise.
The government could neither afford to, nor does it make any effort to, hand private employers the cash to meet the mandates of such magic wand-waving, you see.
If the competitive market made it necessary to pay those entry-level workers 8 percent more – if unfunded government mandates didn't already cost employers way more than 8 percent above and beyond the visible wages showing up in those workers' paychecks – and if the quality of those employees' training and work habits made their efforts worth 8 percent more ... chances are they'd be making 8 percent more, already.
This marks the second straight year in which California has hiked its minimum wage by 50 cents per hour, bringing legal hourly salaries there to $6.75 – $1.60 higher than the federal minimum of $5.15. (Growing black and gray "under-the-table" markets pay less, of course – a general dwindling of respect for the law being another predictable consequence of all such government intrusions.) Only Washington State now has a higher official minimum wage, at $6.90.
"This certainly brings us closer to a living wage than we've ever been in the past," said Susan Gard, spokeswoman for the California Industrial Welfare Commission. "It offers some relief for some of the most marginalized workers in the state at a time when they really need it."
Actually, of course, hardly any American family is attempting to "live" on a single minimum wage, in California or anywhere else. Such wages usually provide the "first rung on the employment ladder" to part-time students just beginning to develop useful work habits, or to senior citizens who actually don't want to earn "too much," lest their government income transfer payments be reduced. (It's tempting to identify such "Social Security" payments as "old-age pensions," but who ever heard of a legitimate pension or annuity being reduced because you went out and developed another source of income?)
Ms. Gard of the IWC is at least correct about how California continues to race ahead of the very inflation caused by such economic meddling. This marks the 19th time that California has raised its minimum wage since it was established at 45 cents an hour in 1943. At 45 cents an hour, a 40-hour week would have purchased only a half ounce of $35 gold during the Roosevelt administration, while 40 hours at $6.75 – $270 – buys nearly an ounce of $279 gold today.
So, even correcting for the massive inflation induced by such Keynesian interventionism, California has indeed managed to race ahead fast enough to effectively double the "minimum wage" its employers are required to pay an unskilled worker ... and we wonder why so many of our formerly domestic products are now manufactured in Indonesia or Sri Lanka?
Meantime, hasn't anyone ever asked why they have to keep doing this every year or two, like rats on a treadmill? Because it doesn't last long, you see. If an hour of unskilled labor is now "worth" seven so-called "dollars" instead of six, all that must really happen, in the end, is that a lot more fiat paper coupons still identified as "dollars" will have to be printed. (See: "Weimar Republic.")
The problem California's restaurateurs and hoteliers face is that they don't have the luxury of moving their "manufacturing operations" overseas.
"It's ludicrous after the year we've just had to do such a thing right now," protests Jeff King, co-founder of King's Seafood Co., which operates 12 restaurants in the state. "Marginally profitable restaurants will go out of business," Mr. King predicts, asking why the state couldn't "hold off for a while until putting another nail in the coffin of the hospitality industry."
Meantime, Golden State officials report union leaders there – hardly any of whose members earn the minimum wage, anyway – are already lobbying for another such raise next year.
The end result? California's cost of living will increase, while more jobs are destroyed. Still more Californians will flee to comparatively free-market states like Nevada, happy to find work here along with a lower cost of living. Then, about six months down the road, they'll start to ask why their new, more laissez-faire home state can't require greedy businessmen to pay a higher "living wage; you know, like we had back home..."
Bump!
Again Facist Davis and his band of left wing perverts at the Kali legislature continue to try and buy votes while driving more businesses out of business.
Even before 9/11, the restaurant, hotel/motel and travel businesses were hurting due to the Clintoon/Da$$hole recession, high utility costs due to Facist Davis, last year's increase in minimal wages and his perverts at the Kali legislature.
From this article: Of course, Mr. Wasserman could just as accurately have reported that the Grinch will now pay a late visit to thousands of California's hotel, restaurant and store employees, who will likely be laid off by employers who can't afford to give them that 8 percent raise.
The government could neither afford to, nor does it make any effort to, hand private employers the cash to meet the mandates of such magic wand-waving, you see.
If the competitive market made it necessary to pay those entry-level workers 8 percent more – if unfunded government mandates didn't already cost employers way more than 8 percent above and beyond the visible wages showing up in those workers' paychecks – and if the quality of those employees' training and work habits made their efforts worth 8 percent more ... chances are they'd be making 8 percent more, already.
This marks the second straight year in which California has hiked its minimum wage by 50 cents per hour, bringing legal hourly salaries there to $6.75 – $1.60 higher than the federal minimum of $5.15. (Growing black and gray "under-the-table" markets pay less, of course – a general dwindling of respect for the law being another predictable consequence of all such government intrusions.) Only Washington State now has a higher official minimum wage, at $6.90.
Post 9/11, the tourist business, travel business, hotel/travel business and restaurant business has been crushed in most places in California. Now this will crush more small and large businesses at risk in Kali!
But hey it feels good to spend someone else's money to buy votes!
The pay a worker receives is only part of the cost of having an employee, therefore no matter how high the minimum wage rate is raised, this minimum wage employee's pay will not keep up with increases in cost of goods caused by these forced minimum wage increases.
Business only has three choices in such situations:
1) Raise prices.
2) Decrease employees to a level which brings payroll costs back to their previous level.
3) Outsource work to a lower cost provider, which usually is out of the area which minimum wage laws apply.
This short term feel good measure is a never ending circle of deception. Government interference in the nature of economics will only lead to one place, and it's spelled A-r-g-e-n-t-I-n-a
No, but they can import illegal foreign labor for the same effect.
But guess what? These same morons (or at least the ones who aren't on the verge of being term limited out) are going to be relected by the idiot voters of California, who will stupidly continue to believe that their representatives are doing a fine, fine job. Some of these people have just voted themselves out of a job, but will never make the connection.
I guess that you can't expect much else from a state where so much of the economy is tied up in the entertainment industry, which places high value on all things "make-believe".
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