Sunday Commentary II: $15 Minimum Wage Fight in Davis Part of Nationwide Struggle

minimum_wageThe Wall Street Journal reports, “The nation’s battle over raising the minimum wage is set to shift largely to cities like Los Angeles and New York over the coming year, pitting business groups against local governments weighing measures to address sluggish wage growth for the lowest-paid workers.”

With the Republican control now in Congress, cities, reportedly encouraged by the Obama administration “are gearing up for new debates after Seattle, Chicago and Louisville, Ky., all approved city-specific pay floors last year. More than a dozen large cities and counties now have their own standards, and the new wave of initiatives could widen the patchwork of minimum-wage laws that already has many states and cities above the national minimum of $7.25 an hour.”

Los Angeles and New York are likely to be on the forefront as they move “to support workers in low-paying service jobs in areas of the country where the cost of living is elevated.”

Davis, with its large college population and its previously unsuccessful effort the raise the minimum wage, figures to be a centerpoint for the new battle.

Outgoing executive secretary of the Sacramento Central Labor Council Bill Camp told the Sacramento Business Journal two weeks that local labor leaders will ask voters in Sacramento and Davis to approve a minimum hourly wage of $15 in 2016.

He told the journal, “We will get $15 an hour when you get a president on the ballot.” He added that he believes that if Sacramento approves the measure, other cities and the state will follow.

The state came close in June to passing a $13 an hour minimum wage, only to have it die unexpectedly in the Assembly labor committee.

Senate Bill 935, authored by Senator Mark Leno, would have raised the minimum wage in three steps, starting at $11 an hour in 2015 and increasing an additional $1 per hour in both 2016 and 2017. Beginning in 2018, the minimum wage would be adjusted annually to the rate of inflation. SB 935 was co-sponsored by the Women’s Foundation of California and SEIU (Service Employees International Union) California State Council.

In 2015, an effort spearheaded by a group called Raise the Wage Davis fell short of putting a similar $15 per hour minimum wage on the ballot for this November’s ballot.

In April, the group conceded that they would fall short.

“It’s our hope to collect 7000 signatures by May 1.  It’s looking increasingly unlikely that we’re going to make that deadline,” Bernie Goldsmith acknowledged to council in April.  “Our efforts started around a kitchen table on January 11; since then, we’ve made a bit of a splash locally.”

“It is our hope to raise the minimum wage in Davis to a living wage,” he said.  “I’m sure that many of you have read the Enterprise and it has had some opinions about our efforts.  The Chamber of Commerce and local businesses have had some opinions about our attempts to engage the community.

“One of the goals of this campaign was to start a public debate on what it would mean in this town to say as a moral proposition that no one who works full-time here should have to live in poverty,” he continued.  “To contribute to this discussion, we’ve discussed engaging several academics, economists to produce a report on what a $15 minimum wage would look like to the economy of Davis, to the everyday worker of Davis, to the businesses of Davis.  What the impacts would be.”

The proposal generated immediate pushback from the Davis Enterprise as well as some in the business community.

In an editorial, the Enterprise argued that “Davis businesses should not be saddled with a $15 minimum wage,” and that “good intentions don’t fund the payroll.”

The Enterprise notes, “If it lands on the June ballot, and gets approved by Davis voters, the measure would set the minimum wage at $11 an hour in January 2015, $13 in July 2015 and $15 at the start of 2016. At that point, the minimum wage would be 50 percent higher than the state rate of $10, with further increases linked to inflation.”

Small business owners on the Vanguard are concerned that they would not be able to afford $15 rates for unskilled workers – this would either mean not hiring help, hiring fewer employees, or in some cases worse consequences.

Meanwhile, the politics of minimum wage increase could threaten to splinter governing coalitions. For example, a few weeks ago, Next City reported, “From a victory for L.A.’s hotel workers to Seattle’s groundbreaking increase to $15 an hour, municipalities are making headway in the effort to bring workers out of poverty and reduce income inequality.”

The efforts in Illinois to raise the minimum wage “have taken a divisive turn, as business interests have pitted workers in Chicago against those in Illinois’ smaller towns and suburbs.”

In mid-November, “after 64 percent of voters agreed that the baseline should be lifted in an election day referendum — state Democrats advanced legislation that would raise the hourly minimum wage in the state from $8.25 to $11 by 2017.”

Meanwhile, in Chicago, “Mayor Rahm Emanuel swayed the City Council in early December to raise the city’s minimum wage to $13 an hour by 2019.”

The state legislature, backed by business interests like the Illinois Retail Merchants Association, is pushing back against the city, “threatening to take away their home-rule authority on the issue. They claim that the city’s proposed wage increase could put Chicago at a competitive disadvantage and drive businesses out of state.”

“There’s no problem raising the state to $10 or $11 and then Chicago raising its own to $13 or $15, as we had originally pushed for,” says Aileen Kelleher of the coalition Raise Illinois. “There’s really no conflict at all, but it was a manufactured conflict by legislators when City Council and the Mayor passed the $13 ordinance. [House] Speaker Madigan got upset and refused to hold a vote on the minimum wage at all. As of right now, 64 percent of Illinois voters want a minimum wage [increase] but legislators are woefully preventing that from happening based on a tight dispute between the city and the state.”

The Vanguard has presented this issue more than once, to date, but has not really weighed in with our own view. On the one hand, wages have stagnated in recent years. Living wage, according to one calculation in Yolo County is $10.42 – that is more than the current minimum wage. That number increases to $15 per hour for two adults and $18 to $20 per hour when there is a child involved.

On the other hand, businesses are operating on low margins as it is, and pushing up the minimum wage too much, too fast, will likely lead to layoffs and perhaps threaten businesses with existence.

From that perspective, it seems like we should push to get minimum wage up to about $10.50 or $11 per hour within the next year or two. We could then seek to have an inflation inflator which would push up wages by between 2 and 3 percent each year.

Starting at $11 per hour in 2016 and then increasing it by 2% per year would push the rate up to $13.15 per hour by 2026. That would give businesses an incremental increase generally around 20 cents per year but avoid what has happened in the past – which is earnings depleted by inflation and then a quick spike of $1 or more that jolts businesses.

Would either side accept such a compromise? It remains to be seen.

—David M. Greenwald reporting

About The Author

David Greenwald is the founder, editor, and executive director of the Davis Vanguard. He founded the Vanguard in 2006. David Greenwald moved to Davis in 1996 to attend Graduate School at UC Davis in Political Science. He lives in South Davis with his wife Cecilia Escamilla Greenwald and three children.

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110 thoughts on “Sunday Commentary II: $15 Minimum Wage Fight in Davis Part of Nationwide Struggle”

  1. Tia Will

    David

    I appreciate your taking the time to revisit this issue. Another aspect of a “living wage” that I have not heard discussed is how much time should an individual have to spend working per week in order to support themselves. For as long as I have been in the workforce, so at least for the past 45 years, the work week has been generally held to be 40 hours. But with real inflation and stagnancy in the minimum wage, as Don Shor has repeatedly and correctly pointed out, raising the minimum wage to $15.00 per hour does not provide even a minimally adequate wage to support more than one person. Thus anyone who has dependents has a real dilemma. If you are a minimum wage worker with dependents you have very limited choices:

    1. If you are very lucky, you can depend on relatives for child care while working more hours. This has the obvious disadvantage of being separated from your child but at least you have the peace of mind knowing your child is safe.

    2. If you are not so lucky as to have family support you have even fewer choices. You can work the long hours and depend on the state to help with subsistence needs. You can work the long hours and subject your children to latchkey situations once they are above the age where CPS would be notified. You can work the 40 hours and put in additional time in the informal economy assuming that you have a talent or skill set which will bring in additional money. This again means time away from your child. At what breaking point of time, does the time necessary to provide subsistence for your child amount to “child neglect”?

    3. You can try to obtain more than one job at minimum wage. However, this is frequently also a losing proposition because of the need to try to juggle schedules while still maintaining enough hours at one for the perhaps minimal benefits offered to full time workers knowing that loss of one job or being assigned too few hours will destroy the delicate balance that you have achieved.

    When discussing the minimum wage, we tend to speak only in terms of the money. For many low wage workers the issue is not just the money. It is both the money, and the time necessary to acquire it.

  2. Anon

    My prediction – Raise the minimum wage, and the result will be: 1) fewer minimum wage jobs available because businesses will have to cut back on the number of employees to keep their doors open; 2) a demand for an increases in salary by those who are making more than the minimum wage, since it would not be appropriate for those making minimum wage to make as much as those directly above them, and it would not be right for those directly above minimum wage to make as much as those above those directly above them, and so on; 2) loss of businesses that could not afford to pay their workers any more and still stay in business; 3) the cost of paying employees more will be passed on to the customer, increasing the cost of living, thereby gaining nothing for those making the minimum wage who will now have to deal with the increase in the cost of living.  As the old adage goes, “Be careful what you wish for.”

    1. DavisBurns

      What do businesses do when their cost of doing business increases?  Like, the cost of flour and pepperoni in a pizza business? The cost of electricity and gas?  The cost the stuff they sell retail?  They raise their prices.  If the cost of labor goes up, the cost of the stuff they sell or their service goes up.  This happens all the time.  So maybe some people will use the gas to drive to Woodland for a pizza is the cost of pizza in Davis goes up a dollar but I don’t see that happening a lot.  Places like Target won’t be hurt.  They are quite profitable.  This is capitalism folks.  This is how it works–pass the cost on to the consumer.

      1. Barack Palin

        That’s how capitalism works to an extent.  Yes the free market determines prices and the costs of goods to bring the product to market enters into its final selling price.  But what you have here is government intrusion into the free market by a local entity which could possibly be determining wages if the $15 minimum wage gets enacted.  Wages should be determined by supply and demand, not government intrusion.  Forcing Davis employers to raise wages will only hurt local businesses and cost local jobs as local employers cut back.

  3. Frankly

    ABB, Fanuc Corp. and other robot makers are counting on Rothaus and a variety of small and medium-size companies to fuel the next leg of their growth. Historically driven by automobile companies and electrical-and-electronics makers, robot companies are finding many smaller businesses want to automate dirty and repetitious tasks that were typically handled with good old-fashioned elbow grease.

    The cost of automation continues to fall.  The cost of labor continues to rise as idiots continue to push for massive minimum wage hikes in their misguided attempts to engineer equality from top-down policy void of economic relevancy.

    Force-increase wages and you increase business costs.  Increase business costs and you reduce profit.  Reduce profit and you reduce returns on capital.  Reduce returns on capital and less capital will be invested in business.

    It is really simple to understand.  I call those continuing to push a $15 minimum wage “idiots” because apparently they cannot understand it.

    1. Alan Pryor

      “The cost of labor continues to rise as idiots continue to push for massive minimum wage hikes in their misguided attempts to engineer equality from top-down policy void of economic relevancy.”

      According to Chris Benner, a Professor at UCD well versed in macro-economics and with credentials far loftier than the posters here, in real dollar terms the minimum wage is less than it has been at any time since since 1956. And if minimum wage had kept pace with productivity gains in the US over the last half century, it would now be $25 an hour. I’d be glad to supply a chart with this data if someone can tell me how to post a jpg image here

      Dr, Benner further states that if the minimum wage were increased to $15/hr it would cost the average family in America about $0.40 per day while giving 56,000,000 workers a raise (of which over 90% are over the age of 21 and over half are the primary wage earner in their family).

      As one of those “idiots” who happen to believe people should get a fair day’s wage for a fair day’s work, I also understand that increasing the minimum wage would be a giant boost for local economies as a number of credible studies have shown. This is because poor people spend all of their money on necessities and food which keeps most of those dollars local instead of flowing into Wall Street corporate profit coffers benefiting comparatively wealthy individual shareholders, hedge funds, and pensions.

      I find it amusing that many of the old retired posters on this blog raging against minimum raise increases are living quite comfortably on pensions subsidized by profits made by underpaying the younger generation. So I think those folks can also afford to pay the extra $146/year their family might end up paying in increased costs each year to help raise 56,000,000 Americans out of poverty while ending corporate welfare to the most notorious and userious employers like WalMart and Target and fast food giants.

      1. Barack Palin

        From the Center For Poverty Research about Chris Benner

        His previous book, co-authored with Manuel Pastor and Martha Matsuoka, is This Could Be The Start of Something Big: Social Movements for Regional Equity and the Future of Metropolitan America, which examines new regional movements around community development, policy initiatives, and social movement organizing, and their potential for promoting greater economic opportunity for disadvantaged residents in metropolitan areas. 

        http://poverty.ucdavis.edu/profile/chris-benner

    2. DavisBurns

      If we bring manufacturing back from china, we could pay our workers a living wage using the principal espoused by Henry Ford.  You want to pay your workers enough so they can buy the product you are selling.  The other car manufacturers were outraged that he paid his workers twice the going rate.

      Ford was a pioneer of “welfare capitalism“, designed to improve the lot of his workers and especially to reduce the heavyturnoverthat had many departments hiring 300 men per year to fill 100 slots. Efficiency meant hiring and keeping the best workers.[22]
      Ford astonished the world in 1914 by offering a $5 per day wage ($120 today), which more than doubled the rate of most of his workers.[23]A Cleveland, Ohio newspaper editorialized that the announcement “shot like a blinding rocket through the dark clouds of the present industrial depression.”[24]The move proved extremely profitable; instead of constant turnover of employees, the best mechanics in Detroit flocked to Ford, bringing their human capital and expertise, raising productivity, and lowering training costs.[25][26]Ford announced his $5-per-day program on January 5, 1914, raising the minimum daily pay from $2.34 to $5 for qualifying workers. It also set a new, reduced workweek, although the details vary in different accounts. Ford and Crowther in 1922 described it as six 8-hour days, giving a 48-hour week,[27] while in 1926 they described it as five 8-hour days, giving a 40-hour week.

      We are paying chinese/asian workers very low wages with poor working conditions so we can buy mountains of cheap s**t.  As long as we meekly accept globalism and allow our country to be hollowed out, we won’t have good jobs and we won’t have quality products.  Does anyone think we NEED all this stuff that is currently available for purchase in at ridiculously low prices?
      Raise minimum wages, I bet the sky won’t fall but as discussed previously, we are conditioned to be afraid to stand up and do the right thing because it is the right thing.  We are going to let Wall Street resume selling derivatives again–why aren’t we afraid they will do just what they did before and  make the economy collapse?  Now there is a fear I can get behind.

  4. South of Davis

    Tia wrote:

    > raising the minimum wage to $15.00 per hour does not provide

    > even a minimally adequate wage to support more than one person

    Tia forgets that a “family” with one person making $15/hour also gets:

    Free Breakfast for the kids at school

    Free tutoring for the kids at school

    Free lunch for the kids at school

    An EBT card to buy food

    WIC benefits (to buy even more food)

    Health care for the kids

    Almost free Section 8 Housing

    Free Obama phone

    Free internet service

    Discounted PG&E

    And many many more programs that give even more free stuff…

    “the single mom is better off earnings gross income of $29,000 ($13.95/hr) with $57,327 in net income & benefits than to earn gross income of $69,000 ($33.17/hr) with net income and benefits of $57,045.

    http://www.zerohedge.com/news/2012-11-27/when-work-punished-tragedy-americas-welfare-state

     

     

    1. Tia Will

      SOD

      And what you seem to be missing is that she would not need any of those services that we pay for if she were payed a living wage. For some reason, you seem to find it preferable that we provide all that care, than that we devise a system in which each is able to earn what they need.

      1. South of Davis

        Tia wrote:

        > And what you seem to be missing is that she would not need any of those

        > services that we pay for if she were payed a living wage.

        Do you think the “minimum wage” should be close to $30/hour (where it would need to be to cut government payments to a typical “working poor single mom”)?

        And what you seem to be missing is that while “some” people will benefit from the higher minimum wage we will “all” end up paying more for most things and a the government will be spending even more (asking us “all” to pay more in taxes) taking care of the newly unemployed as it starts to make sense for even small business like Don’s to fire people and get a “self checkout” machine and more fast food restaurants start to let people order and pay on their smartphones like Taco Bell has started to do (see link below)

        http://www.tacobell.com/static_files/TacoBell/StaticAssets/documents/mobileapp/mobileapp.html

        P.S. If raising the minimum wage reduces the need for government help wouldn’t  every city or state that increased the minimum wage have a year over year drop in welfare spending after the minimum wage was increased?  (I have looked and did not find a single one)…

        1. Tia Will

          South of Davis

          I have stated on a number of occasions that a minimum wage is not my preferred solution to ending poverty. My preferred solution would be a living compensation payed to every man, woman, and child who is fulfilling any role which contributes to the functioning our society. I do not believe that we should be compensated by some arbitrarily based standard that allows some to rake in millions while others doing equally, or more necessary work ( I consider the work of a garbage collector more essential than that of a movie or TV celebrity), make less than a living wage for full time work.

          I firmly believe that we should all be compensated with means adequate to support us for a full time contribution of our time in whatever capacity we are able to contribute. This is not the same as a “minimum wage” it is equal support for equal contribution of the only thing that we all have equally, our time.

  5. Miwok

    Who in their right mind is hiring employees now anyway? No one is getting jobs for 40 hours a week, to avoid  ACA. Oh that’s right, the “affordable” benefits, people who work less than 30 hours so the employers don’t have to pay anything for ACA, and some like me have to pay another 15% for SSI. $15 is a living wage? Do  the math: $15 an hour, max 30 hours or less, $450 a week max. Buy a house? Sure, it’s a living wage right?

    Did I mention I am available for work? I can’t take one of those warehouse jobs for $12 and hour, but I can run one. This 50% stuff is almost not worth it. And that is 20 hours a week. I just hate sitting at home. You gonna require the employer to hire them for 40 hours?

    Hey SOD, no kids, no benefits as you describe..

  6. Alan Miller

    There should be no raise in the minimum wage.  The minimum wage should be abolished.

    The minimum wage will instead be raised, and the law of unintended consequences will be controlled by the laws of economics and politics.

    Welcome to America 2015.

  7. Tia Will

    Miwok

    No one is getting jobs for 40 hours a week, to avoid  ACA.”

    This totally ignores the facts that the recession with its loss of jobs occurred well before the ACA went into effect.

    1. Barack Palin

      This totally ignores the facts that the recession with its loss of jobs occurred well before the ACA went into effect.

      This totally ignores the fact that employers know they can dodge ACA by keeping their employees part time.  We have some people on here that defend the president no matter whether his policies are working or not.

      1. Tia Will

        BP

        We have some people on here that defend the president no matter whether his policies are working or not.”

        This is not about the president. It is about the plan which whether you would like to admit it or not, has worked spectacularly for me. It saved my daughter’s life. And whether you wish to attribute this to the president, or if you wish to go back further and attribute it to Mitt Romney who was the first to put something similar into effect, being a huge proponent of the concept, at least until it became politically inconvenient, makes no difference.

        To anyone who had a child whose life threatening illness was not diagnosed until they after they had graduated from university thus losing their student health benefits but were over the age of 22, the extension of parental health care coverage to age 26 was literally life saving. So whether or not the ACA,” works” is totally dependent on your point of view.

        This totally ignores the fact that employers know they can dodge ACA by keeping their employees part time”

        And this I blame not on the ACA, but rather on those who unethically choose to dodge the ACA at significant material harm to their employees. This is not the fault of the president or the ACA, but rather those who wish to extract as much as they can from the system without regard to the well being of others. No one is making anyone choose to “dodge” any law. This is solely the responsibility of the individual.  Interesting once again, to see those who tend to trumpet individual responsibility the most when it suites them , tend to abandon it most readily when they do not like the actions of our duly elected representatives.

        1. South of Davis

          Tia wrote:

          > It (the ACA) saved my daughter’s life. 

          Are you saying that you and your daughter would not have paid for any health insurance after she graduated from college?  If she had a job and paid for health insurance after graduation (like millions of Americans have done for decades) her health insurance (not the ACA) would have “saved her life”…

        2. Barack Palin

          To anyone who had a child whose life threatening illness was not diagnosed until they after they had graduated from university thus losing their student health benefits but were over the age of 22, the extension of parental health care coverage to age 26 was literally life saving. So whether or not the ACA,” works” is totally dependent on your point of view.

          So you talk about personal responsibility, where’s the personal responsibility of anyone who lets their health insurance lapse?  I have three children and with two of them I made it my personal responsibility that their health coverage stayed in effect until they were able to get their own coverage.

          And this I blame not on the ACA, but rather on those who unethically choose to dodge the ACA at significant material harm to their employees.

          Unethically?  Is it unethical that they’re following the law?  Was the law crafted in such a way that it left loopholes?  Miss Will, I’m sure you take the mortgage interest deduction on your houses and take other tax write-offs when they apply to you, are you being unethical?  Maybe the employers need to keep some employees under 29 hours a week to stay in business.  Are they being unethical if they keep their businesses alive and still supply jobs?

          1. Don Shor

            Tia: …..whose life threatening illness was not diagnosed until they after they had graduated from university thus losing their student health benefits but were over the age of 22, the extension of parental health care coverage to age 26 was literally life saving. So whether or not the ACA,” works” is totally dependent on your point of view.

            BP:So you talk about personal responsibility, where’s the personal responsibility of anyone who lets their health insurance lapse? I have three children and with two of them I made it my personal responsibility that their health coverage stayed in effect until they were able to get their own coverage.

            You are aware that may people could not get insurance due to pre-existing conditions, or were only offered policies that would not cover those conditions?

        3. South of Davis

          Don wrote:

          > You are aware that may people could not get insurance

          > due to pre-existing conditions, 

          Yes I am, but Tia specifically said that her daughter “was not diagnosed” until AFTER she graduated (her word not mine).

          So unless Tia publicly states that she does not care enough about her daughter to make sure she had health insurance (or that she thinks paying for health insurance is a bad idea)  I think we know she was exaggerating/lying about the ACA saving her daughters life…

           

  8. Alan Pryor

    David – You stated in your article,

    On the other hand, businesses are operating on low margins as it is, and pushing up the minimum wage too much, too fast, will likely lead to layoffs and perhaps threaten businesses with existence.

    Do you have any hard evidence of this? Studies analyzing past minimum wage increases in San Jose and San Francisco have shown the general economy prospered after their MW increases.

    1. Barack Palin

      Alan Pryor, would you care to give links to these studies?  I’ve seen one study where the employers in San Jose say the minimum raise hike would cost jobs.  It would be interesting to see the studies you cite and who is behind them.

      1. Alan Miller

        There’s a professor on campus who espouses this idea that with a higher wage, the more prosperous the economy.  I’ll bet that professor has never run a business in his life.

        1. South of Davis

          Alan wrote:

          >  I’ll bet that professor has never run a business in his life.

          Like the old saying says:

          Those who can “do” those who can’t “teach”…

          P.S. I know that some “do” AND “teach”, but most who “teach” have never “done”…

      2. Alan Pryor

        The first thing that worries most people when we talk about our minimum wage proposal is that it will hurt small businesses.  Studies show the opposite – growth among small businesses improves from state to state when comparing those with higher minimum wages in multiple studies – 29% faster, on average, in states with higher minimum wages than the federal minimum between 1998 and 2003.(http://www.fiscalpolicy.org/FPISmallBusinessMinWage.pdf).

        In the year following the implementation of the first San Francisco MW ordinance (2003-4), in a study of affected and unaffected Bay Area restaurants, both full-time employment growth and total hours of work were significantly stronger than in areas unaffected by the ordinance.  This period, immediately following implementation, is most critical because it is the time which conventional wisdom holds that price shocks will have deleterious effects on the economy. (Arindrajit Dube, Suresh Naidu, Michael Reich. “The Economic Impacts of a Citywide Minimum Wage.” Working Paper Series, Institute for Research on Labor and Employment, UC Berkeley).

        Data taken from the 2010 census shows that income inequality declined over the past ten years in San Francisco (seven following the passage of the minimum wage law), while it had increased in the United States as a whole, and had increased in San Francisco in the previous three censuses, 1979,
        1989, and 1999. (Michael Reich, Ken Jacobs, and Miranda Dietz. When Mandates Work: Raising Labor Standards At The Local Level. Berkeley: University of California Press, 17).

        Another claim is that businesses will move out of state to lower wage states if MW are increased. A 2010 study reviewing sixteen years of varying minimum wage policies in counties in different states but with contiguous borders showed that the effects are remarkably consistent at a more local level: “for cross-state and contiguous counties, we find strong earnings effects and no employment effects of minimum wage increases.” (Arindrajit Dube, T. William Lester, and Michael Reich. “Minimum Wage Effects Across State Borders: Estimates Using Contiguous Counties.” The Review of Economics and Statistics. November 2010.  Vol. 92, No. 4, page 961).

         

         

         

        1. South of Davis

          Alan wrote:

          > The first thing that worries most people when we talk about our

          > minimum wage proposal is that it will hurt small businesses.

          It WILL hurt small business.  Are ANY Davis small business that employ a fair amount of minimum wage workers supporting the $15 wage?

          > Data taken from the 2010 census shows that income inequality

          > declined over the past ten years in San Francisco

          Ate you seriously saying that “the most expensive city in America” (with an average two bedroom apartment rent of $3,859/month almost triple the Davis average) has had a drop of “income inequality”?

          An article in the SF Chronicle last year said:

          “Income inequality on par with developing nations” San Francisco likes to think of itself politically, socially and culturally as akin to European countries. But when it comes to income equality – or lack thereof – we’re far less Sweden and Denmark and far more Central America and sub-Saharan Africa.

          http://www.sfgate.com/bayarea/article/Income-inequality-on-par-with-developing-nations-5486434.php

          P.S. I read the SF Bay Guardian (a pro increase in the minimum wage left leaning paper) every week when I lived in SF in the early 2000’s and on line about once a month after I moved to Davis.  I can remember multiple articles complaining about the INCREASE in income inequality and can’t remember a SINGLE one that even hinted things were getting better…

  9. Barack Palin

    The city of SeaTac, which holds the Seattle-Tacoma International Airport, raised the minimum wage to $15 an hour starting January 1 for some businesses. Within weeks of the beginning of the SeaTac “experiment,” the impact of the passage of Proposition One had become evident. Despite the fact that the new law impacts only about 1,600 employees in this town of 27,000, major changes and shifts were already taking place in reaction to it.

    For example, a customer using the Master Park Airport valet parking service at SeaTac will note an extra line on his bill for $.50 entitled “living-wage surcharge.” In December the 215-room Clarion Hotel closed its full-service restaurant, laying off 15 people. The hotel also terminated the employment of a night desk clerk and a maintenance employee, and according to general manager Harry Wall, the hotel was considering a 10-percent increase in room rates just in time for spring visitors. Wall said that without this reduction in workforce, the hotel’s annual payroll costs would have increased by $300,000 thanks to the new minimum-wage law.

    WallyPark, an airport parking services that employs about 80 people at three different locations in SeaTac, is being flooded with applications from people outside the city looking to take advantage of the new law, claimed Homer Ignacio, the assistant manager. As these new applicants are interviewed, Ignacio will be faced with the prospect of being able to hire more highly skilled workers and pay them what he is paying some of his current less-skilled employees. Those present employees face the threat of having their jobs being taken away by a new employee.

    Other adjustments are being made as the new law takes effect. According to Gary Smith, a spokesman for the opposition group Common Sense SeaTac, “a number of businesses made sure they fit the small business category [and were therefore exempt from the new law], even if they had to make adjustments to do that.” Those adjustments no doubt included reducing workforce numbers.

    Perhaps the most telling anecdote comes from Assunta Ng who stayed at a SeaTac hotel last May:

    While attending an event at a SeaTac hotel last week, I met two women who received the $15 per hour minimum wage. SeaTac has implemented the new law on January 1. I met the women while they were working. One was a waitress and the other was cleaning the hallway.
    “Are you happy with a $15 wage?” I asked the full-time cleaning lady.
    “It sounds good, but it’s not good,” the woman said.
    “Why?” I asked.
    “I lost my 401(k), my health insurance, my paid holiday and my vacation,” she responded. “No more free food,” she added.
    The hotel used to feed her. Now, she has to bring her own food. Also, no overtime, she said. She used to work extra hours and receive overtime pay.
    What else? I asked. “I have to pay for parking,” she said.
    I then asked the part-time waitress, who was part of the catering staff.
    “Yes, I’ve got $15 an hour, but all my tips are now much less,” she said. Before the new wage law was implemented, her hourly wage was $7. But her tips added to more than $15 an hour. Yes, she used to receive free food and parking. Now, she has to bring her own food and pay for parking.

    http://www.thenewamerican.com/economy/sectors/item/19075-real-world-proof-that-15-minimum-wage-hurts-those-it-s-claimed-would-help

    1. Alan Pryor

      These cherry-picked anecdotal and unsubstantiated observations from a very conservative web site by an author with no academic credentials (other than he graduated from Cornell) hardly qualify as “real-world proof” as the title of the referenced article implies.

    2. Frankly

      This brings up the point that there are total pay and benefits in excess of wages, and they are not counted in these so called non-partisan economic “studies”.

    1. Alan Pryor

      Bernie is no longer affiliated with Davis Citizens for a Living Wage which is an FPPC registered campaign committee. All of the officers of the campaign committee are Davis residents and we are running our own campaign. Having said that, we welcome the encouragement and support of labor unions.

  10. Topcat

    I wonder what the advocates of a minimum wage increase think about work that is done at a very low or zero wage.  I am referring to volunteer jobs and internships where the person doing the work gets no money for their work but does gain enjoyment or work experience for the time they put in.

    It would seem that those who advocate making for making it illegal to pay less than some specified minimum wage would certainly want to make volunteer work and internships illegal too.

    1. South of Davis

      Topcat wrote:

      > It would seem that those who advocate making for making it illegal to pay

      > less than some specified minimum wage would certainly want to make

      > volunteer work and internships illegal too.

      They already have made most unpaid internships (where you actually do anything) illegal:

      http://www.washingtonpost.com/blogs/wonkblog/wp/2013/06/13/are-unpaid-internships-illegal/

      And are slowly working to make ALL volunteer work illegal, my nephew’s boy scout troop had to “pay” the unions to get “permission” to do some volunteer work (that they needed to do to earn a merit badge) and it is now “illegal” to feed the poor in many parts of the US.

      http://www.motherjones.com/politics/2014/11/90-year-old-florida-veteran-arrested-feeding-homeless-bans

      1. Tia Will

        Topcat and South of Davis

        I have a somewhat different perspective on the role of internships ( free or very low pay or stipends for real work). The justification of this is that the intern learns the skills that will allow them to progress along a career track to eventually make a living wage and sometimes a very well paid position.While this may seem to be a good deal, it does not consider the downsides.

        1. The assumption being made is that the internship will invariably lead to a higher paying job. This is true only if the economy is such that those jobs are being continuously generated. This is obviously not the case during an economic downturn.

        2. I would like to use the medical model as how the concept of internship has not met the changing needs of the times. The commonly used term “house officer” for interns and residents is a hold over from the days when these physicians were expected to be on the job 24/7. This arrangement worked only because these physicians lived in the hospital where they were provided with 100% of their room and board and a very small stipend for incidentals. Thus they had no need for a real salary. Moving forward in time, hospitals stopped providing room and board but still demanded of these physicians working hours far beyond the traditional 40 hour work week. When I was a resident, the standard work week was ninety hours, but there was no formal limitation so if one of the three of us in my class was ill or on vacation, the others were expected to cover. I did many “back to back” call shifts. The rules have changed to the slightly more humane 80 hour work week that interns and residents are now limited to. However, what has not changed is that hours over 40/week are not counted as overtime, nor are they accounted for at all since physicians in training are not paid by the hour but receive a set salary. When I started 30 years ago, that salary was $30,000 yearly for a quite literally unlimited number of hours. At one point during my training, due to a lack of phlebotomists, I spent a several month interval with the first two hours of my day doing nothing but drawing and labeling blood samples, a task at which I had become proficient in medical school. No learning, no additional pay, no reduction in other duties and no compensatory time off. And this was because the hospital at which I was working at the time had chosen not to hire enough phlebotomists.

        Again, what is not being considered is the value of the time that the individual is dedicating to their “learning” during those intervals in which the work that they are doing is vital to the enterprise, but not compensated.

        3. When the actual work is being done by an intern, they are frequently not “learning” but providing services to their “employer” which allows the employer not to have to pay someone else to do that job. That is one less payed job available to someone who has completed their internship. Nice arrangement for the “employer”, not so nice for the person who cannot get a paying job nor for the “intern” whose “learning hours” are frequently sharply decreased by the amount of time they spending doing tasks that they have already mastered.

        I am not the least bit saddened to see that this particular form of indentured servitude is going by the way side. A full days work should provide a living wage. If the small employer truly cannot afford to pay, there could be some form of exemption by company size, or profit or number of employees or the choice to hire only teens for the positions that do not provide a living wage. Some kind of arrangement could be worked out. However, to pretend that we still live in a time where people are not relying on minimum wage jobs as their sole livelihood, would be no different than pretending that “house officers” still lived in the hospital with full room and board and therefore do not need money to live on.

        1. South of Davis

          Tia wrote:

          > The assumption being made is that the internship

          > will invariably lead to a higher paying job. 

          In a (so called) free country shouldn’t I be the one who decides if I want to work for free?

          P.S. My sister worked at an unpaid internship while a UCD senior that let to a higher than average paying job after graduation…

        2. DavisBurns

          The rules have changed to the slightly more humane 80 hour work week that interns and residents are now limited to.

          Even 80 hours is too much and it puts patient lives at risk.

      2. Topcat

        “And are slowly working to make ALL volunteer work illegal, my nephew’s boy scout troop had to “pay” the unions to get “permission” to do some volunteer work (that they needed to do to earn a merit badge) and it is now “illegal” to feed the poor in many parts of the US.”

        I would think that the folks that want to make it illegal to pay less than the minimum wage in Davis will campaign to make volunteer work illegal in Davis.  I wonder how this would affect places like the Davis Food Co-op, non-profit thrift stores like R&R, and organizations like Community Meals?

        1. South of Davis

          Topcat wrote:

          > I would think that the folks that want to make it illegal to pay

          > less than the minimum wage in Davis will campaign to make

          > volunteer work illegal in Davis. 

          I know many people offered to fix the burnt deck by the Co-Op (I could have done it in an couple hours with a helper and a truck full of wood) but the unions wanted to turn the fire in to a high dollar project (so they tore down the entire thing so it could not be “fixed”).

          http://www.davisenterprise.com/local-news/central-parks-oak-tree-deck-in-limbo/

  11. Anon

    Alan Pryor: “The first thing that worries most people when we talk about our minimum wage proposal is that it will hurt small businesses.  Studies show the opposite – growth among small businesses improves from state to state when comparing those with higher minimum wages in multiple studies – 29% faster, on average, in states with higher minimum wages than the federal minimum between 1998 and 2003.(http://www.fiscalpolicy.org/FPISmallBusinessMinWage.pdf).”

    Alan Pryor: “These cherry-picked anecdotal and unsubstantiated observations from a very conservative web site by an author with no academic credentials (other than he graduated from Cornell) hardly qualify as “real-world proof” as the title of the referenced article implies.

    From my research, it appears Alan has cherry-picked the organization he cites for statistics, to wit:

    “The Fiscal Policy Institute (FPI) is an independent, nonpartisan, nonprofit research and education organization committed to improving public policies and private practices to better the economic and social conditions of all New Yorkers. Founded in 1991, FPI works to create a strong economy in which prosperity is broadly shared.

    FPI works to increase public and governmental understanding of issues related to the fairness of New York’s tax system and the stability and adequacy of state and local public services. FPI publishes an annual analysis of the state’s fiscal situation and tax system, a biennial report on the state of working New York, and special reports and articles on a variety of related subjects. In addition, FPI maintains an active program of briefings and other public education activities.
    FPI is part of two consortia of state-level organizations throughout the U.S. – the State Fiscal Analysis Initiative(SFAI), coordinated by the Center on Budget and Policy Priorities, and the Economic Analysis and Research Network(EARN), coordinated by the Economic Policy Institute. SFAI is supported by the Ford Foundation, the Charles Stewart Mott Foundation, the Annie E. Casey Foundation and others; its goal is to enhance the timeliness, credibility, accessibility and usefulness of the analysis that is available on the state tax and budget issues affecting low-income and other vulnerable populations. EARN has the mission of improving the lives of Americans by advancing progressive policy at the state and regional level.”

    Take special note of the last two sentences.

  12. Frankly

    Every 10 percent increase in the minimum wage reduces employment for low-skilled workers by 1 to 3 percent.

    When President Obama was proposing an increase in the national minimum wage from $7.25 to $10.10 per hour, a CBO analysts concluded 900,000 Americans would be lifted from poverty, 500,000 would lose their jobs.  Other economic impact assessments pegged the number of lost jobs at 1 million.

    University of California, Irvine economist David Neumark has examined more than 100 major academic studies on the minimum wage and found about 85 percent of the studies “find a negative employment effect on low-skilled workers.”

    A study by economists William Even and David Macpherson looking at the last rise from $5.25 to  $7.25 concluded that in the 21 states where the full 40% wage increase took effect, “the consequences of the minimum wage for black young adults without a diploma were actually “worse than the consequences of the Great Recession.”

    But the rise in the minimum wage had devastated teens… especially black teens.   The last increase to the current rate hit July 2009 about the time most economists agree that the Great Recession ended.   At that time the jobless rate for black teens hit 40%.  It is about the same today.

    Most economists know all this, and also know that the minimum wage has nothing to do with poverty or unemployment. At the national level it is a political play to box in Republicans.  In California it is another union reward for all the cash the unions spend on Democrat campaigns.  The minimum wage polls well because Americans naturally want everyone to make more money, and they people in these wage categories are generally oblivious to the negative impact on job opportunities.

    The last political consideration is the tax revenue derived from hiking the minimum wage.  Not only will business face greater labor costs for the increased hourly wages they must pay, but they will pay greater payroll taxes and the employees will also pay higher payroll and income taxes, and many will also stop qualifying for other government services.  The end result is more money in government coffers for politicians to reward their unions pals.

    There is not doubt that inflation takes a bite out of earnings at the minimum levels.  But raising wages by government mandate at the expense of so many more people being unemployed is a terrible idea.  It is frankly quite heartless.

    The minimum wage is a starting wage.  It is not intended to support a single person living on his own… and it is certainly not intended to support a family.   People stuck making a wage that is inadequate to support their needed lifestyle have other problems.  Social do-gooders should focus on those things and stop putting their nose into business and economic issues that they know nothing about.

    1. David Greenwald Post author

      “Every 10 percent increase in the minimum wage reduces employment for low-skilled workers by 1 to 3 percent.”

      How do you account for the effects of inflation?

      1. Frankly

        It is irrelevant in that the cost of labor is based on market forces of supply and demand unless the government screws up the market.  Why just look at minimum wage if this is your concern?  Inflation reduces purchasing power for all wage earners.  Why not mandate that all business increase all wages by the rate of inflation?  We should have COLA for all!  I think this is what they are doing in Venezuela.  Makes for great populist warm and fuzzy feelings while the country spirals down into a giant economic collapse.

        With advocacy for a minimum wage hike your are conveniently ignoring the lost jobs impact.  If you think about it, it is basically more kicking the can down the road to our children.  You are also punishing private business and private employees and rewarding public sector employers and employees.  A minimum wage hike is just greater taxation since forcing business to spend more on labor, because labor cost are taxed and taxed progressively, will send more money to government to reward the public sector unions.

        One way you and others having a similar worldview should look at this minimum wage cry is that you already played all your cards on Obamacare.   This was another hit to the job supply only rewarding those lucky enough to have a job through a new tax on business.  And you should be happy that you helped those low wage, low-skilled people get their healthcare… and stop so much wringing of hands about their wages… even though again, Obamacare was basically funded on the backs of our children.

        If I were you I would start thinking about your young children.  If you are lucky they will have great academic gifts and an interest in science or engineering or to push paper for the government.   But the odds are that at least one of them will need a private sector job and learn skills that allow them to advance in pay based on those acquired skills.  And you are basically advocating the reduction of those entry-level opportunities.  You are also forcing companies to cut job training programs and other costly programs that they use to bring in young people to help them launch a career.   You are advocating damage to the future prospects of everyone’s lower academically-gifted kids.

        Increasing the cost of labor results in easier cost-justification for automation.  It makes outsourcing more feasible.  it increases the cost of products… most that are purchased by low income people (low wage workers tend to make the products purchased by low wage workers).

        All these junk studies that Alan Pryor puts out there fail to include the massive increase in the numbers of discouraged and under-employed workers.  The REAL unemployment rate in this country is astounding.  And it is astounding to me that those that claim to be such social justice advocates would push any policy that adds to those numbers.

        I have friends from Bismark ND.  Few of the businesses pay minimum wage in Bismark because the economy is strong and workers are in short supply.  And workers with experience are less likely to be paid starting wages for long… because their experience is marketable in a strong job market and employers are having to pay it.

        If you want to increase wages the right way, advocate for things that increase the supply of jobs, reduce the supply of unskilled labor competing for the limited supply of jobs, and advocate for changes to the education system that develops skills in students that are marketable in the job market.

    2. Topcat

      Yes Frankly, you are correct in pointing out that an increase in the minimum wage hits the lowest skilled and most disadvantaged people the hardest.  I have pointed this out in past discussions, but they folks who advocate for a drastic increase in the minimum wage choose to conveniently ignore this point.

      If we want the lowest skilled and most disadvantaged people in society to be unable to find legal, legitimate work, then a drastic raise in the minimum wage is a good way to accomplish this.

      1. Frankly

        It baffles the mind and really causes me to consider one of three possibilities.

        1. They are ignorant to the facts, and refusing to accept them when presented.

        2. They really don’t care so much about the bottom socioeconomic population.

        3. They see other ancillary (political?  ideological?  personal?) benefits derived from it.

        In any of these cases it is not a very complementary position.

         

        1. Davis Progressive

          yeah if you want people to consider the other side of the story, find non-right wing sources to validate your views.  i don’t have time to dissect and scrutinize every study that gets posted here so if you have a right wing source, i’m going to flat out ignore it.

        2. Davis Progressive

          no i wouldn’t expect you to accept left wing agenda driven sources.  however, we may quibble on what constitutes a left wing agenda driven source.

        3. Barack Palin

          As we might also quibble about what’s considered a right wing agenda driven source.  Anon and I have posted some facts about some of the sources that are backing the higher minimum wage.

        4. Davis Progressive

          fwiw, i don’t think the instant reaction to the wage increase is proof of anything, the question is what happens in the longer term.  most of the neutral studies i have seen show that the immediate reaction is for business to overreact by laying people off and then they rehire later.

        5. Frankly

          BP – here is what DP and others sharing his views do not want to admit.

          They only accept studies from left-leaning universities.  These meet their academic standards and cannot be labeled as “conservative” biased.

          What they will never admit is that the academic study process is largely corrupted with left-bias.

          In fact, a minimum wage hike directly benefits academics as their employers tend to rely on government money and minimum wage increases bring in more tax revenue.  So university employees have a direct conflict of interest.

          But here is the kicker.  With respect to economic issues, for the academic to be credible and non-biased he/she would have to own a business or have spent significant time in his/her life working for wages in the private economy.   The fact that you will find few to no people with these credentials should be telling.  They live in a soft public money bubble and they decide what the data should demonstrate before they collect it and make it so.

          Meanwhile California still has a jobs gap of 1.5 million.

        6. Davis Progressive

          i’ll accept a real study.  you’ve decided to label university/ academic as being left-leaning, but that’s not necessarily the case, economics departments are actually more mixed than other departments.

          “Meanwhile California still has a jobs gap of 1.5 million.”

          which has nothing to do with minimum wage.

        7. Frankly

          David Neumark, UC Irvine Chancellor’s Professor of Economics; J.M. Ian Salas, research fellow at the Harvard Center for Population & Development Studies (and a 2013 UCI Ph.D. graduate); and William Wascher, economist with the Board of Governors of the Federal Reserve System in Washington, D.C., had their study’s findings published last week in the IZA Journal of Labor Policy. It’s consistent with their previously published work summarized in the 2008 book Minimum Wages.

          “There has been a continuing trickle of studies claiming that a higher minimum wage may not cause job loss, which have provided fodder to policymakers and others seeking increases,” Neumark says in a UCI statement. “But our new evidence directly addresses this claim and shows that it is simply not true. Higher minimum wages do destroy jobs.”

          The findings take issue with the use of broad U.S. comparisons that measure employment changes in states with minimum wage increases versus those without, arguing that only adjacent states or counties should be used as comparisons. When the parameters were narrowed in this way to adjust for what would have happened had the minimum wage not gone up, researchers assert, there was no net decrease in employment.

          “These studies raise a good question: What do you use as a comparison or proxy group for states where the minimum wage increased?” Neumark said. “It turns out that it doesn’t matter.”

          Neumark advises separating “our feelings about low wages from the evidence on the effects of the government simply requiring employers to pay higher wages. … The data and the evidence tell us that a higher minimum wage results in job loss for low-skilled workers. We may be willing to accept that job loss in return for other benefits of higher wages for some workers, but we can’t pretend there will be no lost jobs.”

          The university publicized these findings the same day two hotel industry groups sued the city of Los Angeles in federal court to challenge the recent passage of a $15.37-per-
          hour minimum wage. Filed by the American Hotel & Lodging Association and the Asian American Hotel Owners Association, the suit contends the local wage hike ordinance
          oversteps federal laws governing the relationship between labor unions and employers. But a city spokesman expresses confidence “that the ordinance is lawful and valid.”

  13. tribeUSA

    I like David’s compromise suggestion of $11/hr by January 2016; but instead of raising it by 2% per year, peg the annual increase to the rate of inflation.

    I recall that the minimum wage in the late 1960s to late 1970s was around $11/hr in 2014 dollars. Somehow the economy functioned, small businesses prospered. Perhaps we should go with something that has historical precedent for actually working in the real world. $15/hr is unprecedented, and might present risks that exceed the benefits. What about a more moderate increase with historical precedent for working just fine?

    1. David Greenwald Post author

      My suggestions was actually to tie it to the rate of inflation, but I was just illustrating what would happen at 2%, inflation has averaged between 2 and 3 percent a year the last five.

  14. Tia Will

     I think we know she was exaggerating/lying about the ACA saving her daughters life…”

    And this tells me that you know nothing about my circumstances or those of my daughter, or any of the other adolescents and/or young adults that have been affected by these extremely expensive disorders. I do not know anyone, and due to my professional and personal experience with anorexia, whose standardly available individual insurance would cover even close to the expenses required for the intensive inpatient ( frequently multiple hospitalizations at over $ 150,000 per week of hospitalization  in intensive care units and/or locked psychiatric facilities, and subsequent intensive outpatient programs requiring daily weigh ins and group meals as well as both group and individual counseling.  If anything, I am downplaying rather than exaggerating my daughter’s situation because as her psychiatrist put it, she was on the extremely favorable prognosis end of the spectrum of this disease in that she was diagnosed fairly early into the course of her disease ( within the first two years), she was accepting of her diagnosis, which is frequently not the case, she had not yet gone into organ failure, she was amenable to therapy and she was a rapid responder.

    Please, at least get a modicum of information before you start making individualized accusations regarding something of which you clearly have no knowledge.

    1. South of Davis

      Tia wrote:

      > And this tells me that you know nothing about my circumstances 

      I just know what you wrote and when you wrote: “the extension of parental health care coverage” under the ACA saved your daughters life does that not mean that your daughter had coverage under a parent’s health care?

      Then after writing that an “extension” “parental” health care saved your daughters life you wrote you don’t know any “standardly available individual insurance would cover even close to the expenses”

      I know you are getting in to a habit of posting lies than not answering any questions but can you at least let us know if you were lying when you said “the extension of parental health care coverage” saved your daughters life or you don’t know any “standardly available individual insurance would cover even close to the expenses”… (they can’t both be true)…

        1. Tia Will

          Don

          Your diligence as a moderator is appreciated.

          the solution is  quite simple.  I do not engage in conversation with anyone who chooses to make personal attacks. This is true whether I am posting on someone else’s article or one I have written myself.  Problem solved.

    2. South of Davis

      Tia also tells me that I know nothing about eating disorders yet does not know that I have a close relative that worked exclusively with women who had severe eating (and cutting) disorders after getting her masters in clinical psychology.  I’m sure that “someone” with an eating disorder can run up $150K a WEEK of hospital charges in a week, but it is not something that happens “frequently” (as Tia says above)

      Then NYT says:

      “Many must be seen on a weekly basis by a team of specialists, including a psychiatrist, a physician and a nutritionist. A residential program costs $30,000 a month on average.”

      For those that are bad at math that is less than $7K a week (20+ times less than the number Tia mentions).

      http://well.blogs.nytimes.com/2010/12/03/the-cost-of-an-eating-disorder/?_r=0

  15. Frankly

    Between 2007 at the beginning of the Great Recession and April of 2014, California has seen about a 5% decrease in the employment-to-population ratio.  Currently California has a jobs gap of about 1.5 million.  This far exceeds every other state.

    Compared to the next most populated state, Texas with a current jobs gap of only 179,000, we might be asking “what the hell is wrong with us?”

    But instead of working on this problem our severely left-tilted state wants to double-down on policies that perpetuate and increase our joblessness gap.

    Oregon and Washington (the trifecta of the left coast) also have severe jobs gaps (Washington 296,000 and Oregon 167,000).

    Which leads one to ask “what is the left’s end game” with respect to opportunities for people to work?

    Nancy Pelosi, a leading spokesperson for the left coast, reported that she was happy that Obamacare would result in job losses since people would no longer be “job locked” having to work only for their healthcare coverage.  This response seems to provide a window into coastal liberal thinking and maybe provides the answer to the above question.   It seems to clearly indicate that liberals actually don’t want people to work… or they want fewer people to work.

    The good news is that this stealth agenda of “helping” more people to quit working is fully supported by our President.   And California can thank him for not making California’s jobs gap even more glaringly out of balance with other states as the nation as a whole still has a giant jobs gap… although a much smaller percentage than does the left coast.

    But if California raises the minimum wage to $15 per hour we will rocket ahead into “progressive” territory where many more people can join the Nancy Pelosi-celebrated position of not having to work.

    1. Davis Progressive

      “But if California raises the minimum wage to $15 per hour we will rocket ahead into “progressive” territory where many more people can join the Nancy Pelosi-celebrated position of not having to work.”

      california hasn’t even proposed doing that.  they just defeated an increment $13 per hour minimum wage.

          1. Don Shor

            It doesn’t really matter what David is proposing. What matters is what Raise the Wage Davis, Alan Pryor, and the Sacramento Labor Council are proposing. That is a $15/hour minimum wage for all workers in Davis. Which is substantially above the living wage in Yolo County and Davis.

        1. Davis Progressive

          don: what if you and a group of business people in davis met with bernie, and raise the wage and said, hey let’s work to get $11 per hour passed in davis, why not?  bernie kept saying last year he was trying to jumpstart the conversation, he’s a mid-range proposal, with business buy-in.  worth a shot?

          1. Don Shor

            Bernie has mysteriously disappeared from this issue. The others have their proposal and it’s pretty clear that they aren’t interested in discussing any compromises. This is a national agenda.

      1. Frankly

        actually it looks like david is proposing a compromise – i would think it would think that could be the basis of a new conversation.

        So how many fewer jobs is acceptable in your idea of a good compromise?

        1. Davis Progressive

          instead you prefer to have a regressive minimum wage which diminishes in value two to three percent per year, with no alternative to at least allow it to keep pace with inflation.

        2. Topcat

          I wonder if David advocates making volunteer work and internships illegal?  We certainly don’t want people performing useful work in society for zero pay.

        3. Frankly

          I prefer market wages, a robust economy with plentiful jobs, a lower supply of low-skilled workers and a move to make more Americans higher-skilled workers.

          I prefer that politicians and social engineers stop trying to control every outcome in the economy because generally cause more harm than good.

          I prefer that politicians and social engineers focus on the framework of the economy to drive up the amount of opportunity… and let an increasing demand for workers drive up wages.  I would support more public investment in job training and re-training so that our workforce is more transient… able to go where the jobs are and have the skills needed to do the job.  But mandating what a business should pay for labor is economically stupid.   Yes, once we do it we get used to it until the next time, and the next time… but getting used to it also means getting used to fewer businesses and less business growth… and more companies finding alternatives to the growing cost of domestic labor.

    2. Don Shor

      Of course she didn’t say “she was happy that Obamacare would result in job losses.” She made the reasonable point that one of the benefits of the ACA was that people could move from one job to another without risk of having difficulty getting health insurance. If you had a pre-existing condition, and you were in a job that provided health care, it was very difficult to quit and move to another job. Or you would have difficulty getting comparable health insurance. Those of us who buy insurance on the open market as self-employed individuals know exactly what she was talking about. That is the ‘job lock” she was referring to, and it was very real. You were at risk of losing health coverage. Nothing she said provides any “window into coastal liberal thinking” or any of that sort of stuff. The notion that “liberals actually don’t want people to work” is just silly. There is no “stealth agenda.”
      Why do you say stuff like this? Seriously? It really undercuts any valid points you might make. The shrill partisan rhetoric is very counterproductive.

      1. DavisBurns

        The notion that “liberals actually don’t want people to work” is just silly. There is no “stealth agenda.”Why do you say stuff like this? Seriously? It really undercuts any valid points you might make. The shrill partisan rhetoric is very counterproductive.

        I second that and thank you for saying it so nicely.

      2. Frankly

        https://www.youtube.com/watch?v=VmL37TcBtpY&noredirect=1

        Sure seems like she is making the case that you can quit you job and surf for a living and that would be okay.  I think you are putting words in her mouth that didn’t actually come out.

        My partisan tone is deserved in this case because of the impact on jobs and the lack of acknowledgement and apparent lack of care from those pushing for a big minimum wage hike.  I get to hear how much conservative don’t care about those people at the bottom; yet this is exactly who will get screwed by a big minimum wage hike.  So either there is a stealth agenda for fewer people to work, or liberals are just lying hypocrites that don’t really care about the most vulnerable as they claim.  I was choosing the less harsh explanation.

        1. Don Shor

          Frankly, do you want me to discuss this issue in public? Because if I have to be associated with the partisan rhetoric you spew, I won’t. You defeat your own goals.
          Small business owners are already at risk in engaging this issue in public. Unions in Seattle pushed a boycott of local businesses that fought the minimum wage hike. You don’t post here under your own name. You’re not a small business owner. You have nothing to lose in this. You need to learn when and how to speak in a way that will make people listen. Your partisan rhetoric is harmful and will be counter productive. Do you understand that?

        2. Frankly

          Explain it then.  If you can explain it well enough so that I can grasp why people so demanding that they care for the most vulnerable people and children would push for this, then I will move on to that explanation.  But there is only crickets on these points that we are drastically short of jobs and that a minimum wage hike will just increase the shortage.  So I am only left with the opinion that people don’t care.  They are either lying that they care, or they have another agenda.

          This is a big deal Don.  How will your business handle a rise in wages to $15 per hour?  You know that this is not just a hit to the minimum wage… it will cause a ripple effect for the market value of labor up to those making $20 or more an hour.   It will spur wage inflation.

          I am working on a business idea that would move to infeasible with a $15 per hour starting wage.   So are we saying that it isn’t a business worth opening?  It sure sounds that way to me.  I wonder if Texas will feel the same?  Or maybe I can outsource the work to China instead?  Or with the cost of labor increased, I can start looking at automation instead of hiring all that over-priced labor?

          Sorry kids, I cannot afford to give you an entry level job and then train you. You are out of luck. Pay attention to how you vote next time.

          I did just think of another reason that the left is pushing this at the expense of those out of work.

          We have a critical election coming up in 2016.  Democrats are terrified that a Republican might win the White House, because they will likely continue to control both houses of Congress and the state governorships and state legislatures.  Think about all those conservative judges appointed!

          When polled, 56% of Americans believe they are falling behind and they are taking it out on Obama and Democrats by association.   And the Democrats cannot move to economic policy to produce the needed jobs because their rabid environmental activist base.  So instead these people will just throw kids and the  most vulnerable (those that don’t vote in numbers anyway) under the bus to push a forced wage increase that will temporarily make the enough people feel “richer” for enough time to get out to vote for their “saviors”.

          1. Don Shor

            This is a big deal Don. How will your business handle a rise in wages to $15 per hour?

            I would no longer hire teenagers. I almost always have one or two young folks here working at their first-ever job. I just hired a 17-year-old. But I wouldn’t do that if I had to pay $15/hour.
            I keep my payroll proportional to my revenues. I calculated that in order to cover the increased cost of payroll and taxes that this proposal would cause, I would need an increase in gross sales of 17.4%. I don’t anticipate that I would have that increase in sales. So my option would be to reduce payroll hours and make do with fewer employees.

            That is what will happen. I would be less likely to hire unskilled employees, less likely to hire high school kids. Entry-level employers would be less likely to hire people re-entering the work force after incarceration. They would be less likely to hire people who have impairments that limit their ability to perform a broad range of tasks, or that limit their ability to move up with training. So increasing the minimum wage drastically would have an adverse impact on the least skilled and least employable workers.
            It would increase the take-home pay of those who already have minimum wage jobs, or those who are at jobs that pay just above that (many retailers and restaurants peg their pay to the minimum wage). So those folks would benefit, at the expense of their less-qualified peers.
            As I’ve said before, a living wage in Yolo County — according to neutral sources — has been measured at about $10.50 an hour. That was before the ACA reduced health care costs for those at that level of income by providing subsidies. And Davis is a bit higher in housing costs, but even with that factored in, a living wage in Davis is $11 – $12 per hour. So $15/hour is not a “living wage” proposal. It is artificially high. It is not based on living costs in this area.
            Somebody should do a wage survey of local businesses, if they could get them to participate. Unfortunately, most business owners are very leery of engaging on this issue. And for good reason.
            I urge you to stop trying to inject national politics into this issue. You will simply drive centrist thinkers and voters to the ‘other’ side.

        3. Frankly

          Thanks for the explanation of your personal impacts.  I bet the majority of small businesses would write a similar story.

          Unfortunately, most business owners are very leery of engaging on this issue. And for good reason.

          I advocate for them.  And it includes going to battle with those in the driver’s seat pushing it.

          I urge you to stop trying to inject national politics into this issue. You will simply drive centrist thinkers and voters to the ‘other’ side.

          I don’t see it this way.  I see your first statement (which I agree with) giving the proponents cover to do their dirty deed.  And I am offering plenty of opportunity to hear explanations for why it is okay to have these consequences to our kids and our most vulnerable.  If I am wrong then explain it, don’t push the hypersensitivity crap on me… that if I hurt feelings people will go the other way in retribution.   Let’s all pull up some big unisex pants and fight it out with facts.   I can be convinced, but I cannot be silenced when it is something this important.

          You know that this impacts my business, right?  Many of my borrowers would not have a feasible project with a significant jump in wage costs.  When we do the credit analysis on projections a jump in wage costs can easily put them in negative cash flow and cause the project to be declined.

          1. Don Shor

            Many of my borrowers would not have a feasible project with a significant jump in wage costs. When we do the credit analysis on projections a jump in wage costs can easily put them in negative cash flow and cause the project to be declined.

            Good point. And you might wish to explain for others what sorts of businesses those are. I think most people who support this ‘living wage’ idea think they are helping people who work at WalMart or Taco Bell. They would benefit from understanding the impact it would have on other types of businesses as well.

  16. Dave Hart

    All of this discussion underlines the importance of having national policies regarding labor and standards of living.  Most of the comments here really get down into the weeds and the mechanics of how a true living wage is not possible instead of seeing it as a first step for returning ourselves to prosperity.  Minimum wage was a living wage in the late 1960s and early 1970s or at least I was able to make it work at that time before the hyperinflation in 1972.

    So, yes, I think David’s approach is realistic and pragmatic under the circumstances of a small local economic framework.  I support the $15/hour wage and do not believe it will harm my ability to live a comparable lifestyle to the one I enjoy now.

    I don’t see this issue as a zero-sum game where someone’s sub-living wage is necessary to my economic welfare.  I see it as a distinct threat to my social welfare. I want to see everyone with enough income to become better customers to local businesses, invested in their future and the future of their community, hopeful and inspired to do better and not relegated to a second or third class status with no prospect of doing better.  That’s what a living wage means to people who would receive it.

    I also question the business model of companies that are dependent on a wage structure that provides less than a true living wage.  Think about the many businesses in the world that depend on virtual slavery to exist.  Yes, for real, google “contemporary slavery by industries” to see how rampant it is. We all agree that is unacceptable.  If that is unacceptable, then what level of compensation ceases to be unacceptable?  How should we define it as a city, a state or a nation?

      1. Frankly

        So you have no problem with his statement that business owners are slavers, but you have a problem with my suggestion that the left likes it when people don’t have to work?  Seems like a pretty big ideological tilt to me.

    1. Don Shor

      I also question the business model of companies that are dependent on a wage structure that provides less than a true living wage. Think about the many businesses in the world that depend on virtual slavery to exist. Yes, for real, google “contemporary slavery by industries” to see how rampant it is. We all agree that is unacceptable. If that is unacceptable, then what level of compensation ceases to be unacceptable? How should we define it as a city, a state or a nation?

      Ok, I did google “contemporary slavery by industries” and got literally nothing that has anything to do with the businesses that would be affected, particularly in Davis, by the minimum wage staying the same, or going up or down, or anything. The minimum wage largely affects large retailers, small retailers, and the restaurant industry. Are you suggesting that those employment relationships are slavery?

      Now you’ve injected “true” in front of “living wage.” Living wage is a definable thing. It is quantified by people who have no particular agenda, and it isn’t $15/hour in Davis or Yolo County. So you seem to be speaking of some other level of income. If so, how are you defining a living wage? And where did the $15/hour figure come from? We can’t seem to get answers from Alan Pryor or the coalition he is speaking for on that issue, so maybe you can help us out here.

    2. DavisBurns

      I can agree that paying high school students or people with absolutely no skills $15 is probably not a good idea.  How about the current minimum wage for entry level or under 18 (when we assume they are living with parents).  The problem we have when we make exceptions is employers who want to avoid paying higher wages when the worker are trained and should be paid higher wages.

      I would support raising the hourly wage to 10.50 with increases every year and the goal being $15.

      1. Topcat

        I can agree that paying high school students or people with absolutely no skills $15 is probably not a good idea.  How about the current minimum wage for entry level or under 18 (when we assume they are living with parents).  The problem we have when we make exceptions is employers who want to avoid paying higher wages when the worker are trained and should be paid higher wages.

        We also need to think about people with mild disabilities, both mental and physical.  Many of these people will be partially disabled for all of their lives,.  They can be productive members of society if they have simple, low skill jobs to do.  Some of these people are collecting SSI disability payments, but would be very happy to have a simple low paying job to supplement their disability payments.  I do know something about this issue as I have family members with disabilities.

        Another group of individuals that would be hurt by a drastically higher minimum wage are those with criminal records who are trying to get back into productive society.  Most employers are understandably reluctant to consider hiring people with criminal records or those who have been incarcerated.

        I have not seen any indication that the advocates of a higher minimum wage understand how harmful such a move could be for the least skilled and most disadvantaged members of society who would find it difficult or impossible to find legal employment.

    3. Miwok

      I also question the business model of companies that are dependent on a wage structure that provides less than a true living wage.

      I agree. I call it the Warm Body effect. You just want a person in your place all the time, teach them nothing, then complain they are useless and have no loyalty..

      Lots of small businesses I encounter are like that. They are just filling spots with labor until their kid can come in and take over the company for them, meanwhile the kids are living at home, making wages to go to college without showing up, and the owner has his big house, car, truck, boat, etc.

      I have not been surprised when the youngster has no desire to work for that guy, I have even talked to some second generation owners of the family business. They would not work for them until the owner retired and moved out of the business.

      The other thing in that model is what I call the “Spreckles effect”. Run a successful business enterprise then suck off 90% of the profit without ever reinvesting in the plant assets or people. After twenty or thirty years gift it or sell the remnants.

  17. Topcat

     

    Don Shor wrote: I would no longer hire teenagers. ….
     
    That is what will happen. I would be less likely to hire unskilled employees, less likely to hire high school kids. Entry-level employers would be less likely to hire people re-entering the work force after incarceration. They would be less likely to hire people who have impairments that limit their ability to perform a broad range of tasks, or that limit their ability to move up with training. So increasing the minimum wage drastically would have an adverse impact on the least skilled and least employable workers.
    It would increase the take-home pay of those who already have minimum wage jobs, or those who are at jobs that pay just above that (many retailers and restaurants peg their pay to the minimum wage). So those folks would benefit, at the expense of their less-qualified peers.

    Well said Don.  This is the point that the advocates of a drastically higher minimum wage just do not seem to understand.  The people that will be hurt the most will be the least skilled and most disadvantaged in society since they will find it difficult or impossible to find legal employment.  It really doesn’t matter what anyone thinks a “living wage” is if you can’t find a job.

  18. Anon

    “I would no longer hire teenagers. I almost always have one or two young folks here working at their first-ever job. I just hired a 17-year-old. But I wouldn’t do that if I had to pay $15/hour.”

    So if a hike in the minimum wage would cause small businesses to hire fewer employees, which seems blatantly obvious, then I have to ask why people like Alan Pryor are pushing this agenda?  Secondly, and as someone previously pointed out, increasing the minimum wage will cause wage inflation, as those making $15/hr will understandably want to make more than minimum wage.  Wage inflation will just cause businesses to pass this extra cost onto the customer, and the cost of living will go up, causing the Alan Pryor’s of the world to increase the minimum wage from $15/hr to something greater – a never ending spiral upward.  How is this helping anyone?

    1. Topcat

      “I would no longer hire teenagers. I almost always have one or two young folks here working at their first-ever job. I just hired a 17-year-old. But I wouldn’t do that if I had to pay $15/hour.”

      It’s not just teenagers who would find it difficult to find legal employment.  The people that would be hurt the most would be the lowest skilled people in society.  Some of the categories of people that would find it very difficult or impossible to find work include people with mild disabilities, people with poor work habits, people with poor language skills, people with criminal records, and people who have been incarcerated and released back into society.

      If we want to make it difficult or impossible for the lowest skilled people in society to find work, then a drastic rise in the minimum wage is an excellent way to accomplish this goal.

    2. Frankly

       How is this helping anyone?

      Here is who it helps and how it helps them.

      1. It helps a minority of lower-paid wage earners get a raise if they are lucky enough to find and keep a job.

      2. It helps unions because of the wage inflation you mention.

      3. It helps politicians in the Democrat party because of the previous pleases the unions that give money to Democrat campaigns.

      4. It helps the Democrat party because the people getting the wage increases are more likely to vote and more of them are likely to vote Democrat than are the people that lose a job or cannot find a job.

      5. It helps the Democrat party because Republicans will fight it and Democrats can brand them as being mean and uncaring.

      6. It helps government bring in more tax revenue… it is basically a stealth tax increase on business and wage earners.

      7. Consultants and makers of workforce automation tools… because higher cost labor cost justifies investment in new technology to lower labor costs.

      8. Foreign labor… because more outsourcing can be better cost justified.

       

      But here is what it hurts:

      1. Businesses… especially small businesses that run on thin margins.  Some will close down, some will stagnate and not grow and others will never start… due to the erosion of profit margin.

      2. Consumers… especially low-wage consumers because low-wage employees tend to be the ones making the products and services that low-wage consumers.

      3. The lowest skilled workers… because of fewer jobs and because the higher wages will support employers demanding higher skills.

      4. Some existing workers… because fewer businesses will be able to afford training programs and the incentives to train employees to advance will disappear as mandated wage increases close the gap with pay for promotions.  Again, business will just hire people with experience instead of funding the training for overpaid employees to advance.

      5. Teenagers… because there will be fewer entry-level jobs and fewer training advancement programs.

      1. Topcat

        “But here is what it hurts:

        1. Businesses… especially small businesses that run on thin margins.  Some will close down, some will stagnate and not grow and others will never start… due to the erosion of profit margin.”

        It’s not just businesses, but also non-profit organizations and social service organizations that would be adversely affected.  Examples include thrift stores, child care, elder care, food banks, etc.  The City of Davis utilizes teenagers in the Summer as lifeguards and playground leaders.  We can expect these types of opportunities to be cut back or eliminated.

  19. TrueBlueDevil

    I think Seattle is the current test bed for this liberal touchstone.

    UC Davis students saw that when the minimum wage rose, so did the price of food at the Coffeehouse. Cause and effect.

    Don’t forget, this is the political party that just spent $7.5 trillion dollars in hot checks (borrowing) to get the economy moving, and it isn’t. This has been the slowest recovery ever, and we have a record number of able-bodied people out of the workforce. Meanwhile, the same party pushes for Amnesty for millions of illegal immigrants, expanding the labor Supply, thereby driving down wages for lower-skilled workers. They contradict themselves, it is basic economics.

  20. Tia Will

    Part of the problem that I see with the discussion is that there are at least 4 different groups with very different interests all being discussed as though the group of choice by the author is the only one that counts when making their point.

    The four major groups as I see them are

    1. Those folks, primarily teens, living at home and seeking entry level work for experience and spending money. It is true that these folks don’t need above minimum wage.

    2. Small businesses. In this I would include those like Don Shor’s business and the non profits and other groups listed by Frankly above. It is doubtless true that some of these folks might have to cut back on employees or hours, or choose to make less themselves depending on their individual circumstances. It is also true that some might benefit from folks having more discretionary spending money, but I agree that is highly individual in outcome.

    3. Workers who because of a downturn in the economy, lack of individual skills, or previous poor life choices are now needing to support themselves and cannot do so on their current wages thus necessitating reliance on government programs and/or the charity of others.

    4. The very large corporations with their individual outlets in Davis who would not be at all harmed by paying their workers a minimum wage but perceive that they would be harmed because they feel it is their inherent right to profit while forcing others into the downward spiral of people so desperate that they are willing to work for any wage offered.

    Depending on our individual backgrounds, circumstances, careers and personal inclinations, we all seem to chose the group about which we care the most, and portray this issue from the point of view of this group. I know that I do. My focus is on the well being of group #3. I understand the focus of the local small business person on group #2.

    What I would like is an honest and balanced accounting of the impacts on each group in our current state of being, not the pretense that we have something that we do not, whether that is my vision of everyone with sufficient money for full time work of any kind, nor the myth of a free market that provides enough for everyone who simply works if the government would simple get out of the way. Frankly has stated on many occasions that my utopian vision has never existed ( true, but there are countries that are much closer than we are) and I would point out that his “free market” vision in which everyone can succeed if they just work hard enough has also never existed. What I am seeking is not a “my side is right” but a question of how can we best achieve a balance between the needs of these four general groups without imposing undue burdens on any of their members.

    1. Don Shor

      What I would like is an honest and balanced accounting of the impacts on each group in our current state of being,

      It seems to me it’s up to the proponents of a $15/hour minimum wage to provide that accounting.

    2. South of Davis

      Tia wrote:

      > My focus is on the well being of group #3.

      Interesting that Tia chooses to “help” this group by giving forcing “others” to give them more money, not helping them improve their “individual skills” or make better “life choices”…

    3. Topcat

      4. The very large corporations with their individual outlets in Davis who would not be at all harmed by paying their workers a minimum wage but perceive that they would be harmed because they feel it is their inherent right to profit while forcing others into the downward spiral of people so desperate that they are willing to work for any wage offered.

      I would reword section (4) to more accurately reflect the way I see the world:

      4. The large corporations and  their individual outlets in Davis such as Starbucks, Chipotle, Panera Bread, Rite Aid, CVS, Target and many others.  These organizations typically pay more than the current minimum wage but under the proposed $15 wage.  They typically employ people with good customer service skills and they often provide good opportunities for employees to improve their skills. These companies generally operate with tight margins and strict cost controls and do not have the luxury of being able to pay above market labor rates.
       

    4. Topcat

      1. Those folks, primarily teens, living at home and seeking entry level work for experience and spending money. It is true that these folks don’t need above minimum wage.

      This sounds like a good argument against a drastic raise in the minimum wage, I think it would be better for society to have teenagers working part time jobs where they can learn good work habits than to have them idle and unemployed and getting into trouble.

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