Raising the minimum wage in California is a controversial topic as it pits unions against business groups and puts legislators in a corner trying to decide whose valid points to support. In full disclosure, I am a small business owner who has employed thousands of individuals over the past ten years. I believe the real debate remains on whether or not an increase in the minimum wage helps the poverty issue in California. Unions are calling for a livable wage for union workers. This is of course a worthy call to action, but a simplistic public approach to a highly complex economic issue.
California is a state with a high cost of living due to its desirable weather, beaches, mountains, deserts and city attractions and of course real estate and industry leaders in technology, business and the movies.
So it is understandable why so many Californians are barely making it in this costly environment. But business leaders will tell you that a rise in the minimum wage, even over time, will force many to lay off employees, raise the cost of goods and services and replace younger employees with older more experienced staff who they feel warrant the pay.
What is not being discussed in this debate is how to help those without jobs find gainful employment. Raising minimum wage is great for those who are already working – but it has the potential to add more to the unemployment line and for some this will push them into deep poverty.
One way to balance the issue is to curtail the overabundant number of regulatory requirements hindering small and mid-size businesses from expanding because they are wrapped up in endless reporting to local, regional and state agencies – taking time, money and energy away from their business practice.
I’m not talking about environmental regulations, more of the routine nonsensical regulations that cause restaurant owners for example to file reports to over 11 agencies just to remain open. Elevating some of these burdensome regulations would open up a business owner’s ability to do more business, hire more staff and welcome more customers.
And by hiring more staff the business community could take on the issue of poverty.
Even the Congressional Budget Office’s report on minimum wage noted no real positive effects on the economy or in dealing with chronic poverty. And unfortunately most reports favor the political whims of the report writers. Sad but true.
Three recent reports done for the City of Los Angeles varied drastically in their opinion. One stated it could cause the loss of over 25,000 jobs. Another estimated it could create over 20,000 jobs and just for good measure another was neutral on how many jobs it could impact.
The debate should be about how all can benefit from this proposed action. It needs input from all sides including those who represent the poor. After all living isn’t all about the numbers; it’s about the people.
Mario A. Guerra is the former Mayor of Downey, President of Independent Cities Association and business owner. He can be reached at Mario@Guerrains.com