Monday, April 4, 2016

California's Minimum Wage Madness

Despite the years—decades—of research revealing the damage caused by forced minimum wage hikes, state and federal governments are still pushing this unsound and unjust policy.

The California state legislature just rammed through a $15 minimum wage hike.

Yes, rammed. Sunday deliberation turned into Friday passage and then Monday signage and celebration.


Let’s be very clear: they did not raise anything. They have only imposed more costly regulations on businesses, small and large, in the state of California.

New York State has jumped on board to continue this madness.

Where do these state legislators think the money is going to come from for these outrageous proposals?

Businesses in California, and to a lesser extent in New York, are reeling under a moribund, slowed economy.

Obamacare is dragging down the employment opportunities. High taxes and the reckless spending of the state legislature have discouraged entrepreneurs, young and old ,from expanding their  operations, or from even testing the trade markets.

Now the legislature is demanding that every entry level employee make more money than active service men and women.

I went to a local McDonald’s this past weekend. The manager told me that the restaurant would be closing for a month. Remodeling, she told me. What for? They were setting up automated kiosks. No longer will customers look up at a menu and order a meal from a living person.

Robots Love Minimum Wage increases (Credit:

The machines are moving in, and pushing out entry level employees. Young people who were hoping for that early job to learn necessary skills for other work will have to look elsewhere, if they find anything at all. 

Why would they do such a terrible thing? 

The liberal media has praised this development, countering the arguments that dangers linger in the state’s economic future.

But first, a little background on how this bill got passed in the first place.

The state's legislature will take up a proposal to increase the minimum wage to $15 an hour, up from its current $10, by 2022. The bill is likely to pass because of a deal reached over the weekend between Gov. Jerry Brown, labor leaders and some of the state's top legislators.

Backroom deals between Big Government and Big Labor. Business interests had no say at the table.
And of course, who loved this bill?

Labor leaders praised the California bill on Monday. "It shows the power of standing up," Mary Kay Henry, president of the Service Employees International Union, told The Huffington Post. "It shows that by sticking together, working people speak with a powerful voice and are heard by our elected representatives."

What is supposed to be the benefit of this legislation?

No. This bill merely shows the strangle-hold that Big Labor has on California. This disgusting shoving-match for power in Sacramento proves that lawmakers who vote against their constituents’ best interests are just protecting their own special interests. Big Labor buys them a seat in the state assembly, and the legislator keeps the fast-food assemblyman of graft and sinecures flowing to the unions.

But there is good news, right?

Higher wages in California alone could boost a lot of people: Almost 18 million individuals are employed in the country's largest state economy, and 118,000 of them make the minimum wage or less. Further, unlike federal law, California law does not permit employers to pay tipped workers a lower minimum wage. That means a hike to $15 would apply to the state's tipped workers as well.

“Could.” “Might.” Possibly? Lies. All of it. Even for those still working, the wage increase will run into cost-of-living increases across the board. What’s the use of a little more money in your wallet when that little bump will get run over by the rising costs of groceries at the grocery store?

This increase may impact tipped positions, if they still have a job. Restaurants are not going to just start handing out what little profit margins they have left. The costs will fall on the consumers. They costs will drive away customers.

Housing costs are a particular problem for California's low-income residents. Many parts of the state -- particularly along the coast and in areas within commuting distance of Los Angeles, San Francisco and Silicon Valley -- are facing a dearth of affordable housing. California rents are the second-highest in the country, after those in Hawaii.

Take Guadalupe Salazar, a McDonald's employee who lives in Oakland and makes $12.55 an hour. It’s not enough. Her monthly rent is $900, nearly half of her take-home pay if she works 40 hours a week.

Watch housing rates go up even faster. They rents will outpace the higher wages. Inflation is the new normal.

I have read about families who struggle with four kids on one income. Question: why do these adults insist on having kids when they do not have the money to raise them? A lack of personal responsibility is prevalent in the state of California. Instead of learning new skills and improving their marketability to prospective employers, many low-age Millennials want to demand more money just for showing up.

Higher minimum wage--
fewer workers.

The free market just does not work that way.

Minimum wage laws are ensuring that a minimum number of people are working. They will enshrine a minimum number of businesses staying open. Outside of Silicon Valley, commerce of all kinds will cover, cave, or run for cover in another state because of this forced wage hike.

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