Investor’s Business Daily On The Cost Of California’s New Minimum Wage Hike
Authors Of California Minimum Wage Hike Are Destroyers, Not Saviors
Unions are always agitating for an increase in the minimum wage, but wherever it is raised, jobs are wiped out. (AP)
Jobs: California is hiking the state minimum wage by 50%. No surprise there, though. California was once known for its forward-looking ideas, but now it’s become the state that generates the most damaging public policies imaginable.
Under the deal that has yet to be approved by the legislature, California’s $10-an-hour minimum wage will be $15 an hour in 2022, rising in increments starting with 50-cent jumps on Jan. 1, 2017, and Jan. 1. 2018. Those will be followed by $1 increases each year until the magic number is arrived at.
Of course the political left, which includes almost the entire media complex, will celebrate the law, and its authors will be lauded as compassionate people deserving of praise.
In reality, though, they are destroyers.
When government artificially raises wages, it increases unemployment. Anyone should be able to understand that when labor costs are increased by government force, businesses often have no choice but to cut jobs if they are to remain profitable.
In a report compiled last year for the Los Angeles City Council, the University of California at Berkeley found that an increase to $15 an hour would kill jobs and contract the economy in the city. And this finding is from a group of scholars in favor of a minimum-wage hike. And it is also not the only report to have reached that conclusion. Many other studies agree, including one from the American Enterprise Institute, which determined that Seattle lost 10,000 jobs between September and November and its jobless rate lurched a full percentage point higher due to the city’s new minimum-wage law.
Other consequences of minimum-wage increases include the destruction of small companies, especially minority-owned franchises that are driven of out business, and the acceleration of the trend of robots taking human’s jobs.
Raising the minimum wage is, at its root, an act of cruelty, says George Mason University economist Donald Boudreaux. Any advantages of minimum-wage hikes, he says, come at the expense “of minority and inner-city teens, of low-skilled immigrants, and of other workers who are poorly advantaged yet who, in most cases, need employment more than do those advantaged workers who manage to find jobs at the higher, minimum wage.”
Boudreaux also believes that “no one has a right to use force to extract unbargained-for benefits from anyone else.” Unfortunately, that’s an insightful argument never broached in politics and media because it has become widely accepted that government can do whatever it wants as long as a majority agrees on it. The only question is how much the destroyers are allowed to ruin.