Opinion: The evidence continues to mount that minimum wage hikes have economic costs

by Placerville Newswire / Apr 24, 2016 / comments

Recent Headline -- UC Berkeley Touts $15 Minimum Wage Law, Then Fires Five Hundred Of Workers After It Passes...

Last month, California Gov. Jerry Brown reached a deal with legislators and labor unions to raise the minimum wage to $15 an hour by 2022, the highest of any state.  It’s hard to argue that minimum wage workers in California don’t need a raise.  The cost of living ranges from high to ridiculous, depending on where you live.  In Silicon Valley, even a six figure income might not get you a decent home.  San Francisco is even putting homeless people into “tiny houses” of under 100 square feet.  So yes, California workers need higher salaries.  But hiking the minimum wage is using one counter-productive liberal policy to solve a problem created by a lot of other counter-productive liberal policies.

California is an incredibly resource-rich state that was nicknamed the Golden State for good reason.  But in recent years, it’s faced a tsunami of problems – crushing debt, high taxes, fleeing businesses, rampant illegal immigration, water shortages, rolling brownouts and more – and just about all its problems, short of earthquakes, have been caused by its leftwing government. California still has some very lucrative industries to keep the tax base afloat, like entertainment and high tech.  But while those industries make a handful of people very wealthy, they drive up real estate prices and other costs of living in places where they’re centered.  It makes it that much harder for anyone outside those industries to survive.

Add to that the massive costs of regulations that get passed along to the consumer.  The state’s been trying to make it easier to start a business, but it’s still far more costly than in other states.  There are all the generous social programs not restricted to actual US citizens.  California has a state debt of over $130 billion and reportedly faces up to $220 billion in unfunded liabilities, mostly due to government worker pensions. That’s why the state has an income tax, sales tax, property tax, gas tax – well, let’s just say that if they could think of a way to tax earthquakes, they would.

So to help people cope with the high cost of the heavy hand of government, California will use the heavy hand of government to force struggling business owners to pay higher labor costs.  Surely, this will have no negative effects.  Well, maybe in Bernie Sanders’ dreams.

According to the Bureau of Labor Statistics, job creation in Seattle had been rising since 2010…until April of 2015, when it suddenly fell off a cliff, with the worst job losses of any 9-month period since the recession.  What happened last April?  Purely by coincidence, that was when their new minimum wage, the highest in America, took effect.

San Francisco already imposed a big hike in the city’s minimum wage.  One of my favorite stories about that involved a used book store that had long been a hipster hangout.  Patrons were shocked when the owner announced it was closing because the new minimum wage was going to cost him more than his entire net profits.  One dumbfounded customer told a reporter that when he voted to double the minimum wage, he never imagined it was going to hurt businesses he liked!

Gov. Brown recently said that if Donald Trump became President, California would have to build a wall to keep Americans from fleeing into California.  News flash, Jerry:  you need to build a wall now to keep businesses from fleeing to Texas.  A 50 percent hike in the minimum wage will only hasten that and make life worse for workers in the long run.  It does people no favors to give them a raise if you make their jobs disappear. 

There is a better way to get wages up.  Rein in the tax-and-spending, and the social justice warrior mentality.  Return to the type of business-friendly, low-regulation, free market policies that made California an economic dynamo to begin with.  Stop focusing on raising the minimum wage and create conditions that help people achieve their maximum wage.  But that’s unlikely, because it would require scrapping all the failed leftist policies that are dragging California down.

California workers should suggest that for once, politicians actually heed the advice of a Hollywood celebrity.  I refer to Oliver Hardy, who used to tell his bumbling pal, Stan Laurel:

“Stop trying to help me!”

[by Mike Huckabee]