$15 Per Hour Minimum Wage Qualifies for November State Ballot

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Local Supports in June 2015 at City Hall lobby for minimum wage hike
Local supporters in June 2015 at City Hall lobby for minimum wage hike

The “Fair Wage Act of 2016” has officially qualified for the state ballot as the supporters, SEIU (Service Employees International Union) United Healthcare Workers West turned in 423,236 signatures, enough to qualify for random sampling and avoid a complete count. The ballot measure is headed to a November vote of the people, where it would raise minimum wage to $15 an hour by 2021.

The ballot measure follows several failed attempts by the legislature to raise minimum wage from current levels up to $13 an hour.  Locally, efforts to raise the minimum wage in Davis to $15 an hour stalled and then moved to a task force, while Sacramento enacted their own compromise measure.

The Sacramento Bee is reporting this morning, “The initiative’s sponsor, Service Employees International Union United Healthcare Workers West, could choose to abandon the measure as late as June 30, amid the possibility that lawmakers, Gov. Jerry Brown and others could agree on an alternative approach before then.”

The measure phases in the increase as it increases minimum wage by $1 per hour each January 1 until it reaches $15 per hour in 2021.  At that point, minimum wage will be adjusted to keep pace with the cost of living in California.

The sponsors note, “Many working Californians, including parents and seniors, have full-time jobs yet struggle to make ends meet. The minimum wage has not kept pace with the cost of living and is worth less today than it was 50 years ago. This loss of purchasing power means millions of Californians are unable to afford an adequate standard of living, which harms families and the State’s economy and budget.”

“Almost one-quarter of California residents live in poverty? More than half of California minimum wage earners are over 30 years old and thirty percent have children? Californians cannot support a family on the current minimum wage of $10 per hour, or $20,800 per year, for people working full time,” they write.  “Despite being employed full-time, Californians who are paid the current minimum wage often must rely on the State’s social safety net to meet their basic needs.”

“The purchasing power of the minimum wage will continue to erode if it is not adjusted yearly to reflect increases in the cost of living. Raising the minimum wage will increase the earnings of many Medi-Cal recipients, making them eligible for federal subsidies on California’s health benefit exchange, saving the State millions of dollars a year in Medi-Cal costs. Raising the minimum wage will boost economic activity and increase sales and income taxes.”

The statewide effort avoids the problem that some have cited in going city-by-city to impose minimum wage.  A few years ago, the Davis Enterprise, in running an editorial against the local approach argued, “We oppose a city-by-city approach to the minimum wage. The state is the appropriate place for this change to occur.”

“California has led the country on environmental, health and civil rights protections and it’s only appropriate that we would become the first state to enact a minimum wage that allows millions of families to live in dignity,” Los Angeles County Supervisor Sheila Kuehl said in a statement.

But others have opposed such an effort.

The California Chamber of Commerce said earlier this month that it would oppose any state-wide ballot initiatives for a $15 minimum wage, arguing that it would create new costs for state and local governments as well as businesses.

“Under these initiatives, California small businesses will also bear the burden of facing higher costs every year with the inclusion of a CPI [Consumer Price Index] escalator,” said CalChamber President and CEO Allan Zaremberg. “Oftentimes, even in recessions, prices go up, and small businesses will be required to pay even more when they are making less. This is an unsustainable model that is bad for business and will hurt the very employees this wage increase seeks to help.”

The impact of a minimum wage hike on jobs remains controversial.  However, one study released late in 2015 by Cornell University’s School of Hotel Administration focusing on restaurants found that neither the restaurants nor their employees have suffered significant losses as a result of wage hikes in the past.

“There is no doubt that restaurateurs face higher expenses as a result of minimum wage increases, but if restaurants are raising prices to compensate, those increases do not appear to decrease demand or profitability enough to sizably or reliably decrease either the number of restaurants or the number of employees,” Michael Lynn, a co-author and professor of consumer behavior and marketing, said in a press release.

A Field Poll from August 2015 showed that about seven out of 10 voters favored the measure, with nearly half saying they strongly favored it.

—David M. Greenwald reporting

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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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83 thoughts on “$15 Per Hour Minimum Wage Qualifies for November State Ballot”

  1. Sam

    When Seattle did about this same thing last April their unemployment rate went from 3% to 4.7% and 7,243 people lost their jobs. I know it sounds like a good thing to do and like it will help people, but it is going to have a devastating effect on low skilled workers and retired individuals.

      1. Sam

        That article talks about the metro area unemployment including other cities from April to October. I pulled unemployment figures for Seattle from April to January. I do agree that there are many factors that increase and decrease employment in a city. A 57% increase in unemployment after the minimum wage increase does give you some idea that the notion of increasing wages will increase spending and thus lower unemployment is incorrect.

        1. David Greenwald Post author

          The other problem is that a lot of the cuts are anticipatory cuts and over time those jobs come back. There is no doubt that increased costs in the short term can decrease employment. The question is whether increased purchased power translates to more sales and therefore helps in the long run.

        2. Sam

          Anytime you increase the cost of an item less of that item is consumed.

          That is 10 months of data and the number of people losing their jobs are increasing. How many months of data are needed to tell that it is not going to  translate into increased buying power?

    1. hpierce

      Well, it looks like the hand-writing is on the wall in most of the most desirable ‘business’ states… right or wrong, this is a national movement… I’d be more worried about how many businesses move off-shore/out of the country…

      The most precious/desirable businesses will not be affected, as I see it… they already pay most if not all employees more than $15/hour and provide at least basic medical… just can’t imagine that many fast food places, restaurants, agriculture [particularly], other minimum wage employers will ‘leave the State’…

      That said, we need to be realistic… in order to stay in a business, prices for products and services will rise… a business is not a “for-loss” proposition… at least not for long.

      What I see is a compression of the ‘middle class’ and those truly ‘struggling’… don’t think that the ‘rich’/upper middle class will notice, except, perhaps, philosophically, one way or the other… they don’t generally do fast-food, shop at Walmart, Costco or Target (which won’t necessarily be super-affected, although there may well be a reduction in the lowest paid/producing staff)[say goodbye to ‘greeters’?], etc.

      I have to disclose, that except when I was in HS, working at a summer camp, I have never worked for minimum wage or below… even working summer camp, I was housed (yeah, a tent, but a nice one) and fed, beyond my “sub-minimum wage”. Perhaps, given the food being taken care of, the ‘value’ of that might have actually brought me up to either ‘training wage’ or even ‘minimum wage’. I do know that the experience looked great on my resume, and helped me land my first “real” job…

      I also have concerns that there may be no provision for “training wages”… for young folk first entering the workplace… and those with developmental ‘issues’, who might not be as productive at first, but need the opportunity to learn job skills, feel productive, and become ‘the best that they can be’.  I have not seen the proposal, so I have no idea if those concerns are addressed.

      I am not adamantly opposed to the proposal, but have strong concerns.

      1. Alan Miller

        The most precious/desirable businesses will not be affected, as I see it… they already pay most if not all employees more than $15/hour and provide at least basic medical…

        Sort of, but not really.  As the floor rises, those just above the floor will demand a higher wage as well, pushes all the lower-rung wages higher.

      2. Don Shor

        The most precious/desirable businesses will not be affected, as I see it… they already pay most if not all employees more than $15/hour and provide at least basic medical…

        Most small retailers do neither of those things.

        1. TrueBlueDevil

          Top restaurants in big cities pay minimum wage, the wait staff makes most of their income via tips.  I was once told the same thing about Nordstrom, salespeople make the money up in commission. Commissioned sales women at Nordy’s men’s department can make $150,000

        2. Miwok

          Give cites or a person who does $150K a year at Nordstrom or this is an urban legend.

          I talked to a person in the Middle of Wyoming and her job is tips. Wait staff HAVE to declare the Minimum even though they work for tips and 25% of minimum while kitchen staff make minimum. NO benefits on either.

          The so called restaurants will eventually do what UCD and lots of other “employers” do: Hire everyone on “temporary” contracts,  NOT pay SS tax or Benefits, and stick every expense they can with the employee that used to be an employer expense. the $12-15 wage is the threshold for this. Higher, and the employee has bills and expenses that they might as well stay at home accepting unemployment.

  2. Frankly

    Anytime you increase the cost of an item less of that item is consumed.

    This is absolutely true and you only need a common sense processor to understand it.   Apparently many lack common sense.

    While it is true that previous minimum wage hikes have been absorbed by the economy… wait, no… they have not.

    Take a look at the U6 measure from the Bureau of Labor.  It still shows that we have a very high number of discouraged workers.

    Small business starts have been declining and are lower as a percentage of the working population than have been since the Great Depression.

    The cost of labor is just one of the many costs that have been levied on business.  Taxes, regulations, Obamacare… you name it.

    The offset has been some relief for the cost of products needed by business.  Ironically this cost relief is at least partially due to the outsourcing of the manufacture of many products and raw materials that business needs… those jobs left the US primarily because of the higher cost of labor in the US compared to the alternatives.

    Lastly there is automation.  Technology is much bigger labor market opportunity as the price of human labor is artificially increased by minimum wage hikes.  Just like environmental extremists lament the falling price of oil and natural gas because it eliminates more expensive alternative energy opportunities from the market, the increased cost of labor suddenly makes alternative automation solutions feasible.

    The global economy and technology are the two primary reasons that we cannot rely on the old historical proof that the economy will just absorb the higher cost of human labor from minimum wage hikes… in fact it never really has.

    1. TrueBlueDevil

      Frankly, you’re the expert here, but I heard that in a “typical” year, we used to add say 500,000 new businesses, lose 400,000 businesses, with a net gain of 100,000 per year.

      The same person claimed that during the Obama Administration we’ve seen the opposite; we see less business start ups, and more losses, the net being we are losing businesses.

      Is this true?

      I know a small business person who is of retirement age. He enjoys working, and the modest income he generates augments his social security. When a problem employee confronted him about his need for health care under Obamacare, the business owner said he thought it didn’t apply to his very small, 4 part-time workers business. But he said if it did, no one would go over the part-time threshold / hours would be reduced, or he would close his business.

      1. Don Shor

        When a problem employee confronted him about his need for health care under Obamacare, the business owner said he thought it didn’t apply to his very small, 4 part-time workers business.

        The Affordable Care Act has no impact on businesses with less than 50 employees. He should just direct the employee to the health care exchange.

        1. South of Davis

          Before the Obamacare/Affordable Care Act the employees of a small business did not get fined by the government if they didn’t have health insurance today “you must pay a fee called the individual shared responsibility payment. (The fee is sometimes called the “penalty,” “fine,” or “individual mandate.”)” and many small business owners (even those with way less than 50 employees) are having more and more workers ask about getting (or getting more money to pay for) health care.

          https://www.healthcare.gov/fees/fee-for-not-being-covered/

          1. Don Shor

            many small business owners (even those with way less than 50 employees) are having more and more workers ask about getting (or getting more money to pay for) health care.

            That’s fine. They’re welcome to ask. But the employer has no obligation or responsibility to provide it if they have less than 50 employees. Small business owners have always faced the issue of employees going elsewhere for the benefits. If it’s important to them, they’ll provide those benefits. Or they’ll suggest the employee go to the health care exchange.

      2. South of Davis

        TBD wrote:

        >  I heard that in a “typical” year, we used to add say

        > 500,000 new businesses, lose 400,000 businesses,

        > with a net gain of 100,000 per year.

        http://www.bls.gov/bdm/entrepreneurship/bdm_chart5.png

        It is important to remember that it is easier for politicians of BOTH parties to raise money from a big chain than it is from a little guy working 60 hours a week trying to get by.  This is why year after year the big guys are using their friends in government to make it harder and harder for the little guy to stay in business.  The politicians are happy to help since the big guys give them big money and the little guys give them little to no money…

        http://www.thedailysheeple.com/wp-content/uploads/2013/08/Self-Employed-As-A-Share-Of-Non-Farm-Employment-425×255.png

      3. Frankly

        TBD – the government’s statistics on small business growth is squewed because of the rise in single employee sole proprietorships.  In fact, this has also been somewhat of a pressure release valve for the government having to take responsibility for lower unemployment numbers.  Since the Great Recession many people that have skills to work could not find work and had no choice but to go on unemployement or start scrounging for consulting/contract hours.

        In terms of small business that actually hires employees… those numbers are WAY down and declining.  And since small business accounts for 65% of all job creation… well you get the point.

    2. Tia Will

      Frankly

      Anytime you increase the cost of an item less of that item is consumed.

      This is absolutely true and you only need a common sense processor to understand it.   Apparently many lack common sense.”

      This is a great illustration of why I feel that absolutist statements frequently miss the mark. If you feel that this is “absolutely true” then surely you would have been a fan of the soda tax. The goals were four fold. 1) Raise awareness as I believe that increased cause usually does. 2) Increase cost thereby decreasing consumption as you claim is an inevitable outcome. 3) Generate revenue – hard to argue at least in the short term until decreased usage erodes the increased revenue 4) Serve in a leadership role in making other communities aware of this option. And yet, you claim that while the soda tax would have “no effect” you are equally adamant that the wage increase will have a profound effect. Hmmm…..

      1. Mark West

        “then surely you would have been a fan of the soda tax.”

        The proposed soda tax was a local tax only, and consequently, would have had no effect on consumption. A Davis only minimum wage would kill business in Davis, but would have little or no impact outside of town. If we had been discussing a State-wide soda tax, then some of your arguments would make sense. As it is, you are comparing apples with orangutans so the rest of your ‘points’ are just noise.

  3. Mark West

    Whether or not this ends up being a good idea, the one aspect that we should all applaud is that it is a State-wide effort. This is exactly where this decision should be made and not on a city by city basis.

    1. Barack Palin

      I agree.  We didn’t need Davis being an island where neighboring towns had an advantage of lower wage costs.  That said I believe this will lead to an overall loss of jobs.

  4. TrueBlueDevil

    Even Governor Moonbeam is against the minimum wage requirement.

    http://dailycaller.com/2016/01/08/15-minimum-wage-poses-problem-for-this-democratic-governor/

    For those concerned about the working poor, closing the border would be a far more effective solution. Tens of millions of lower- and middle-income jobs have been snapped up by those willing to work for less because they are here illegally, and the $8, $10, or $15 an hour they earn here is way more than the $2 an hour they would make in Mexico in the sun.

        1. TrueBlueDevil

          I was actually fudging what I have been told, because I didn’t believe it. I engage people, ask questions. The immigrants from Mexico I have spoken with a few years back consistently said they were paid about $1 per hour, if they could find work, 10 hours a day.

          I get the feeling that a defacto caste system and racism also come into play. Notice how everyone on Spanish TV appears white?

        2. South of Davis

          On December 18, 2015, the National Commission on Minimum Wages (“Comisión Nacional de los Salarios Mínimos” or CONASAMI ) approved a general minimum wage increase of 4.2%, effective January 1, 2016.

          The wage increase will raise the general minimum wage from $70.10 Mexican pesos per day (currently, approximately $4.08 USD) to $73.04 Mexican pesos per day (approximately $4.25 USD when the article was written in December and down to $4.15 today).

          The Mexican Peso has been dropping like a rock against the USD, 10 years ago a dollar got you 10 pesos, a year ago it got you 15 pesos and today a dollar gets you 17.59 pesos.

          P.S. The Mexicans that work with tourists in Cozumel Cancun and Cabo make a LOT more than the minimum wage since a typical American will tip more than a days “minimum wage” for EVERY round of drinks.

          P.P.S. The drop in the Peso will get you some great deals “off the beaten path” but I’ve been noticing that the nicer places (that have menus with prices in dollars) seem to be charging more than ever (I paid more for a dinner for two at El Farallon in Cabo this year than I paid for dinner for two at the Kitchen in Sacramento last year)…

           

      1. South of Davis

        I know Alan is being sarcastic when he says “anyone who owns a business cannot fire anyone without cause, and if they do, they have to replace them, all at minimum wage or above.” but I sometimes wonder when people like Tia say “a Universal Base Income would be an even better solution.” if they really think the “Universal Base Income” would work…

      2. Sam

        Tia-Every time you bring this up I point out that there is already a system in place to give the working poor a Universal Base Income in the United States. It is called the Earned Income Credit. Can you explain to me how the Federal and California EIC does NOT work as a Universal Base Income for the working poor?

  5. Alan Miller

    The minimum wage doesn’t go far enough.  We also need a minimum employment effort, where anyone who owns a business cannot fire anyone without cause, and if they do, they have to replace them, all at minimum wage or above.  If this causes a hardship to the business, since they cannot lay off the workers, they cannot go out of business either, as that would be a hardship to the workers, so they would have to stay in business and take no profits or make any investments until all workers were paid.  Should they run completely out of money, which would also result in loss of jobs, such businesses would then be required to take a subsidy from the government to stay in business.  The problem with the $15/hr. minimum wage is it doesn’t think of cause and effect, and it doesn’t take the problem to the next level.  My proposal would solve the problems of below-living wages, increased unemployment, businesses going out of business — essentially everyone would be employed and secure and the government would pay for it all.

    Simple. Why hasn’t anyone ever tried this before as an economic model for a country?

  6. Barack Palin

    $15/hour is just the first stop, if this passes the SEIU will be emboldened to come back for even a higher minimum wage.  What’s to stop them from coming back in 2 or 3 years?

    As has already been stated, the workers now making $17 to $20/hour are not going to like making that when they see others who are less skilled making $15/hour.  It’s going to ramp up all wages which will in turn cause businesses to cut back.

    Waiters and waitresses getting what’s being touted as a livable wage will see their tips drastically cut by patrons.  It will be more like Europe where tips are very small to nothing.

    1. South of Davis

      BP wrote:

      > What’s to stop them from coming back in 2 or 3 years?

      They won’t have to come back if this passes since it has a “circle of death” built in.  After the “minimum wage hits $15  it “will be adjusted each year to keep pace with the cost of living in California” so the law is set up to kill jobs in the state by 1. increasing the minimum wage that increases the cost of living then 2. increasing the minimum wage even more year after year.  At $15/hr we will be at about $30K/year and every year it goes up more and more salaried workers will have to get raises so they are not making less than the “minimum wage”…

        1. Sam

          That is true. After automation and job loss for people with low skills, you will have price increases to compensate for the higher labor costs.

          Those of you that are retired living on pensions, how is your pension payment cost of living adjustment calculated each year? If you have a UC retirement it is a maximum of 6% per year based on CPI in San Francisco and LA Region.

          For Social Security COLA adjustments are made on national CPI increases, not local.

          There is a good chance that inflation caused by the wage increase will significantly decrease the buying power of those on a fixed income.

          This is going to hurt the low skilled and retired individuals the most. It will help skilled workers and those in debt with fixed interest the most.

           

  7. Napoleon Pig IV

    This is a badly conceived tax that, if implemented, will drive more businesses out of California, a state that already over-taxes and over-regulates but, weather aside, does not offer a lot to show for it. Even before businesses actually move, employment levels will fall, whether “official” statistics show it or not.

    Far better to encourage businesses to move INTO the state, and to encourage people to produce and consume and otherwise go about using their resources as they individually see fit without “help” from unions and their political lackeys. The days of legitimate need for unions in the U.S. are long gone, as are the days of any need at all for government regulation of wages.

    So, I’ll be voting “no.”

    1. hpierce

      Excuse me, but it is not a “tax”, although some ‘tax illiterate’ people will see it that way… it’s a ‘mandate’ .. one I do not necessarily support…  a “tax” goes to government… to be ‘distributed’… the distribution here goes to people employed.  A higher minimum wage will bolster SS & Medicare funds… unless the measure cuts the number of people paying into those systems.  That might be likely, but don’t know.

      The proposal may well be ill-advised, but I call “b******t” on those who call it a “tax”.  A ‘disincentive’, possibly, as it affects business decisions…

      I believe it should be a national decision to raise the minimum wage, maybe State, but definitely not more local…

      1. Napoleon Pig IV

        I think you’re splitting hairs over the definition of “tax.” Is there really a difference in net effect of a traditionally-defined “tax” and some other government enforced mandate forcing non-voluntary payment of private resources to others?

        Is there really a difference between a tax and a pay-off in some jurisdictions? When ISIS “taxes” the territories it controls, is that a “tax” or just extortion? Exactly where are the real lines, versus the points of debate, once you take away subjective judgment about good guys versus bad guys and focus instead on free will versus coercion?

        1. Barack Palin

          I agree Pig, most of us knew what you were referring to.   Just as some people like to call it a soda tax others might refer to it as a penalty.

  8. Tia Will

    This is going to hurt the low skilled and retired individuals the most. It will help skilled workers and those in debt with fixed interest the most.”

    I think that Sam has expressed this well. Like everything else in a society that chooses to base itself on competition with the stronger, more economically successful or better connected taking as much as possible, any step that is taken will have winners and losers. So whether one promotes the change, or opposes it depends on whether or not they perceive themselves to be a winner or loser. We see that in almost all the comments here.

    It would seem to me, that an obvious solution would be to guarantee an above poverty level of provision for everyone. I am quite sure that despite Frankly’s reassurances that those who work can always just go out and find a better job, that this is not always possible. Even if jobs were very plentiful, some in our society have disabilities or other challenges that will keep them from advancing up that mythical ladder of success. We do provide enough ( barely, and with multiple hoops to jump through) for those who are obviously disabled, but what about those who can pass as competent, and are very hard working, but who do not have the abilities to advance. Those, we smugly confine to a life of working multiple jobs often without benefits or any hope for improvement and then blame them for lack of initiative. I simply refuse to believe that we cannot be better than this.

  9. Biddlin

    En primer lugar, para ser claros, no sé cuál sería el salario digno óptima, pero creo que sin duda debemos a esos trabajadores, jubilados y otras personas que se encuentran muy por debajo de ese nivel, un ingreso habitables. No creo que nada a un mínimo es una solución realista.
    En segundo lugar, con el riesgo de ser objeto de burla por los detractores habituales, el etnocentrismo expresada por algunos Vanguardians  es incorrecto, y preocupante.

    First, to be clear, I do not know what the optimal living wage would be, but I think certainly we owe to those workers, retirees and others who are well below that level, a livable income. I do not think anything to a minimum is a realistic solution.
    Second, with the risk of being derided by the usual detractors, ethnocentrism expressed by some Vanguardians is wrong and worrisome.

    1. Sam

      Tia and Biddlin- Do you not realize that the Earned Income Credit already helps create a living wage for the working poor? Do you believe that the EIC does not help create a living wage for the working poor? Why do you keep suggesting solutions that already exist?

      1. Biddlin

        “Do you believe that the EIC does not help create a living wage for the working poor?”

        That’s correct. The EIC does not create a living wage for the working poor.

        1. Sam

          Last year a single parent with two kids working a full time minimum wage job in California would have made $26,138 or $12.57/hr. Why not increase the current California EIC to help create a living wage for the working poor rather than increasing the minimum wage for all workers creating inflation and job loss?

          1. Don Shor

            From Wikipedia:

            Childless workers that have incomes below about $14,340 ($19,680 for a married couple) can receive a very small EITC benefit. …
            For tax year 2013, the maximum EITC benefit for a single person or couple filing without qualifying children is $487. The maximum EITC with one qualifying child is $3,250, with two children, it is $5,372, and with three or more qualifying children, it is $6,044.

            It could be a reasonable way to reduce poverty, but it would take a pretty significant expansion.

        2. Sam

          It is a better method than raising minimum wage.

          If you took all of the money spent on Section 8, SNAP and other programs that assist the poor in purchasing specific individual items and just increased the EIC credit at the State and Federal level you might get close to a living wage without even adding additional funds.

      2. Tia Will

        Sam

        Tia and Biddlin- Do you not realize that the Earned Income Credit already helps create a living wage for the working poor? Do you believe that the EIC does not help create a living wage for the working poor? Why do you keep suggesting solutions that already exist?

        Yes, I am aware that the EIC helps the working poor. And what I am arguing for is its expansion to everyone. Right now aid to the “working poor” is a hodge podge of programs for which some of the working poor, as well as those who are unable to work, or who work in their own homes such as caretakers for the disabled or children do not  qualify. I advocate for a UBI because it would eliminate the need for these variably applicable and in some cases hard to utilize programs and provide a base income for everyone, not just those defined, rather arbitrarily as the “working poor”.

  10. Justice4All

    The commentary here is proof of why the minimum wage needs to be raised. One myth after another has been parroted, perpetuated and propagated in these comments. Im going to try and de bunk the BS one at a time.

    1- Raising the minimum wage kills jobs: False, any job losses will be replaced by the increased demand for services due to the increased buying power of workers, thus driving demand for labor, providing jobs, at a one to one ratio.

    2. Raising the minimum wage causes ridiculous inflation. True, prices of some goods may rise, particularly in the restaurant industry, but prices rise regardless of minimum wages. Alan Pryor wrote a really good article outlining how these costs are reflected, from the perspective of business owners and academics by industry, drawing upon census data and the work of UC Davis economist Chris Benner.

    3. I saw someone mention workers who make six figures on commission/tips. While that may be true in some circumstances, its not anywhere NEAR the actual low wage worker in low wage industries. Your average retail worker for example makes around 12 an hour, hardly the six figures, and really struggles to pay the rent, even with two jobs.

    4. I saw someone bring up the “ROBOTS WILL TAKE ALL OUR JOBS!’ line. People have been saying this for centuries. Automation is something that will happen regardless of minimum wage. Same thing as globalization. Anything that can be automated, will be automated. Anything that can be outsourced, will be if it makes business sense to do so. Keeping the minimum wage where it is doesnt solve this problem, nor does raising it hasten the process.

    5. I heard someone talk about expanding the EITC. Hey I think thats a great idea. But do you think Congress is actually going to get off their asses and actually do something to help working poor people? I think not. They are beholden to the wealthy, not working people. As congress continues its calculated inaction, power continues to devolve to the executive and the states/municipalities. That is why we need to explore local solutions to the best of our abilities. As written the California EITC is woefully inadequate for the needs of low wage workers.

    6. Hiring discrimination is a thing. It just is. Raising the minimum wage will cause more older, skilled workers to re enter the workforce, crowding out younger workers and other marginalized worker groups. Thats why some reasonable provisions to look out for young workers must be included in any local minimum wage ordinance. This is the only provable negative impact that happens in local living wage ordinances.

    7. The unwritten policy bomb. What hasnt been mentioned here in the commentary is the role that Prop 13 plays in all of this. The reason why people in California cities are talking about the need to drastically raise the minimum wage is because the cost of living in this state is so high. That is due, in part to the over capitalization of the real estate market here. Housing prices are through the roof. Why is that? Well, for example, my parents bought their house in 87 for 245k. That house is easily worth 5x that now, but their house payment is significantly less than a one bedroom apartment in town. Prop 13 is a big part of that, not to mention the whole “corporations never die” thing that allows the corporate property tax rate on their buildings to stay at 79 levels in perpetuity.

     

    Lastly ill just say this. There is no reason why big corporate retailers cant pay their people a living wage in town. I am optimistic that the Income Inequality task force created by the city will create policies including a living wage mandate that makes sense for the city, its workers, its businesses, non profits, and the broader community. As far as the statewide initiative goes, I am obviously going to support it, but I dont think that should deter the city from exploring options to study and alleviate poverty in our city.

    1. Sam

      Justice,

      First off, still waiting for your promised article refuting my claim that raising minimum wage hurts the working poor because they lose Federal benifits. Second, how can you make the claim that raising minimum wage won’t kill jobs when Seattle unemployment went from 3% to 4.7%? Why hasn’t the added buying power increased spending and employment in Seattle like you projected?

      1. Justice4All

        Well, if its your claim, isnt it on you to prove the underlying premise? I cant prove to you that unicorns dont exist. Can you back up your claim that unemployment rose in Seattle? Google searches dont seem to support your claim.

    2. South of Davis

      Justice4All wrote:

      > 1- Raising the minimum wage kills jobs: False,

      I agree with you that we should raise the minimum wage but making a blanket statement that raising the minimum wage will kill jobs is false means that you don’t understand how we will barely notice a $0.50 increase and a $50 increase will kill almost every minimum wage job in the state…

      > Raising the minimum wage causes ridiculous inflation. True, 

      It looks like we agree on this fact.

      > 3. I saw someone mention workers who make six figures on commission/tips.

      The post was about a SMALL number of people at Nortstrom who make $100K+ but those people also have a big base salary and are not minimum wage workers.  Anyone that wants to make more money can work on commission if they want to make more (and want to work harder).

      >4.  I saw someone bring up the “ROBOTS WILL TAKE ALL OUR JOBS!’ line.

      > People have been saying this for centuries. 

      I’m a big California history buff and I don’t recall reading about anyone talking about “robots taking our jobs” in the 1800’s.  Back when I was making $3.35/hour I had to talk to a person to get gas, get money from the bank, mail something or buy a plane ticket.  In the last week I got gas, money at the bank mailed a package at the 5th street post office and bought a plane ticket without talking to a real person.  If you think “robots are not taking low skill jobs” you are in denial.  I was at a talk last week and the speaker mentioned a book and I was able to pull out my smartphone and buy it (used for $3) on the Amazon site in 10 seconds…

      > 5. I heard someone talk about expanding the EITC

      We have a LOT of programs in addition to the EITC to help people with low incomes (WIC, EBT, Obamaphones, Utility discounts, etc.) as Tia points out it does take a little effort to sign up for everything, but once you get in to the system as a poor person you will tend to find that people will help you get help from more and more programs.

      > 6. Hiring discrimination is a thing. It just is. Raising the minimum

      > wage will cause more older, skilled workers to re enter the workforce

      Do you really think that a lot of older retired skilled workers are waiting for a few more dollars an hour before they start working full time again?

      > 7. The unwritten policy bomb. What hasnt been mentioned here in the

      > commentary is the role that Prop 13 plays in all of this.

      Prop 13 helps to keep rents lower and wages higher.

      If the tax bill on rental homes and apartments goes up the rents will also have to go up.  If you want to find out how prop. 13 has helped business go talk to some of the people in the Brinley buildings who are going to have a lot less to pay employees as the sale forces all their rents up.

      http://www.davisenterprise.com/local-news/new-downtown-property-owners-say-theyll-go-slow/

      P.S. There is NOT a “thing that allows the corporate property tax rate on their buildings to stay at 79 levels in perpetuity.” Every person and corporation that has owned property since 1979 has seen their tax bills MORE than DOUBLE (and people and business that have spent money to remodel or improve their properties legally with building permits have seen their tax bills TRIPLE)…

  11. Justice4All

    Don- There havent been good examples put out there. The Sacramento task force came up with an under 18 exemption, which has its downsides in a city like sacramento, along with a “training wage”. Really those exemptions helped massive retailers like Walmart in practice, and just further encouraged employee turnover because the training period was over 6 months.

  12. tribeUSA

    This proposal goes a little too far….

    I would support a proposal to increase minimum wage to $12/hr by 2018 and then peg it to inflation. I remember seeing an economic analysis in 2014 that suggested $10-$11/hr was the ‘sweet spot’ back in 2014; significantly benefiting workers while not hurting employers/businesses too much–I think $12/hr by 2018 would bring minumum wage back to the level it was (in constant dollar terms) in the late 1960s and early 1970s–workers did a little better, and the sky did not fall on businesses.

    1. David Greenwald Post author

      I call this the Prop 13 factor. Businesses have always fought minimum wage increases. What they should have done was sponsor legislation that brings the minimum wage up to a point that was acceptable and then allow it to grow with cost of living to remain at that level. Instead, they have fought everything and that produces these punctuations in cost that at least in the short-term can hurt businesses.

        1. David Greenwald Post author

          In a letter to President Obama and congressional leaders urging a minimum wage increase, more than 600 economists, including 7 Nobel Prize winners wrote, “In recent years there have been important developments in the academic literature on the effect of increases in the minimum wage on employment, with the weight of evidence now showing that increases in the minimum wage have had little or no negative effect on the employment of minimum-wage workers, even during times of weakness in the labor market. Research suggests that a minimum-wage increase could have a small stimulative effect on the economy as low-wage workers spend their additional earnings, raising demand and job growth, and providing some help on the jobs front.”

        2. South of Davis

          David wrote:

          > with the weight of evidence now showing that increases in the

          > minimum wage have had little or no negative effect on the

          > employment of minimum-wage workers,

          I have not met anyone that does not want to see “some” increase in the minimum wage, but anyone who points to the “evidence” that the $0.25 increase in the minimum wage (from $3.10 to $3.35) when I was in High School “had little or no negative effect on the employment of minimum-wage workers” needs to learn that just because a $0.25 increase did not result in huge job losses does not mean that we will have the same result with a $25 increase.

      1. Biddlin

        “We have actual proof in Seattle that higher minimum wages do in fact cause job loss.”

        I was in Seattle recently and the evidence is mixed, because the $15 dollar wage doesn’t take full effect for large employers until next year and 2021 for smaller ones. The net effect so far has been: Employment in food service and drinking places, establishments with large numbers of minimum-wage jobs, was 110,000 in October, the most recent month available. This is slightly higher than in April, when the new law was passed. It is well above the 96,700 peak before the Great Recession.

        Retail trade employment hit a record 171,500 in October, compared with the pre-recession high of 148,700.

        What we do know, is that minimum wage earners spend all of their income, which has a direct beneficial effect on retail sales.

        As I stated before, I don’t think the minimum wage is a good method to raise standards of living for poor people. I also think that, if we are honest, we all agree that $10.00/hour  is a subsistence wage in California.

        1. Justice4All

          the problem with that 10$ an hour reasoning is that it assumes the cost of living in california doesnt vary. A subsistence wage in redding is so much less that one in SF.

  13. Sam

    Justice- That is an article from December talking about unemployment data for the Seattle-Bellevue-Everett metropolitan area. If you pull unemployment data from the Department of Labor and Statistics for the city of Seattle you will see that unemployment went from 3% to 4.7% from April 2015 to January 2016. It is very clear that the higher wages are causing job losses.

    David is saying this is a short term effect and that the jobs will come back because of increased buying power, but what is short term? One year of job losses? Five years?

  14. Justice4All

    Well correlation is not causation, its important to remember that. I can give you plenty of data from say San Jose, where they raised their wage by 25% in a day and employment in low wage industries went UP, along with the restaurant creation rate.

  15. Sam

    I agree correlation is not causation. You should compare Seattle’s unemployment over the last ten months to a similar size city that did not increase their minimum wage during the same timeframe and then look for factors that would increase or decrease employment. Take the Sacramento Metro area. Unemployment went from 5.5% to 5.5% during the same time period. Aside from the minimum wage increase, what other factors caused unemployment to rise in Seattle?

    As I stated before, if you increase the price of something people consume less of it.

  16. Barack Palin

    Another problem will be is what the minimum wage inflation raises are tied to.  Will it be national or regional?  If regional then seniors SS and others on fixed income will see a drastic loss in buying power as the national inflation numbers, which SS is tied to, always lag far behind CA regional percentages.

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