Sometimes the best of intentions create unintended consequences. One wonders if that is going to be the case in California, which is in the process of phasing in a $15-per-hour minimum wage.
On the face of it, this would seem to be a good thing because it boosts pay for workers in California, where the cost of living is so high. But the Washington Post reports a new study from the University of Washington suggesting that the $15 rate actually hurts low-income workers:
“When Seattle officials voted three years ago to incrementally boost the city’s minimum wage up to $15 an hour, they’d hoped to improve the lives of low-income workers. Yet according to a major new study that could force economists to reassess past research on the issue, the hike has had the opposite effect.
“The city is gradually increasing the hourly minimum to $15 over several years. Already, though, some employers have not been able to afford the increased minimums. They’ve cut their payrolls, putting off new hiring, reducing hours or letting their workers go, the study found.”
This is not good news for California. The UW study would also appear to lend credibility to warnings voiced by restaurants, the hotel industry, farmers and farmworkers that this and other new wage requirements will actually cut their incomes and raise costs to consumers.
The California Legislature passed wage and overtime-hike measures last year and small business owners are bracing for the worst.
Yes, trying to ensure workers can boost their wages is commendable. But our lawmakers are failing these workers by instituting shallow, simplistic and symbolic approaches that in reality are highly likely to backfire as this new study suggests.
Unfortunately, in Sacramento and most government offices, those making laws and setting regulations have little if any experience as economists, private-sector workers or business owners.
Since the stakes are so high for workers, shouldn’t there at least be a basic requirement that those who micromanage wages must have spent some time meeting a payroll? Playing with other people’s money and work is easy when there is no accountability or need to confront reality.
Alex Saab is an attorney and small business owner. He is a council membr in the city of Downey and a former mayor.