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L.A.’s $15 Minimum Wage: Great for Government Workers, Bad for Everyone Else
When I think about California, I think the best thing is to paraphrase historian Richard Cobb’s famous quip about France: “Wonderful state, California… pity about the Californians.”
On Tuesday, the Los Angeles Municipal Star Chamber (a.k.a. City Council) voted 14-to-1 to follow Seattle over a fiscal cliff and increase the city’s minimum wage to $15/hour (given that California law does not allow workers earning tips to be paid less than the minimum wage, that means waitstaff would earn fifteen dollars plus tips.) The city’s non-Mexican, anti-American Mexican-American mayor Eric Garcetti has been fervently pushing for Los Angeles to commit economic seppuku since taking office, and he has gotten his way. One can only assume the one holdout vote simply wanted a more reasonable living wage of $100/hour.
While The New York Times cheers this lunacy on, anyone with half-a-brain would know that this scheme is madness. Of course, the collective population of much of Los Angeles can barely cobble together a third of a cerebellum, so it is entirely understandable that this nonsense would pass in a town as overwhelmingly stupid as this one. But what is the real aim? Well, the unions were the real drivers of this wage hike, so that should explain everything. After all, there are only three major industries that remain unionized in L.A.: the entertainment industry (which is coughing up blood like a consumptive); the public school teachers; and the government employees. As the first group really does not have to worry about making minimum wage once it secures union membership, the latter two unions are certainly the real culprits.
With union wages tied to the “prevailing wages,” such a minimum wage increase will trigger a union wage increase by contract. So those hard-working bureaucrats sitting in the permitting offices who work from 9 AM to 5 PM Monday through Friday — except for that every other paid Friday that Los Angeles city workers get off, as well as all the federal and state paid holidays like César Chávez Day (what, you don’t get that as a paid day off?) — will get a series of wage increases triggered by these minimum wage hikes in addition to any increases mandated by their union contracts.
So while the minimum wage increases will wreak havoc on the city’s economy by putting more low-skilled workers out of a job and driving up prices on basic necessities, services, and housing, the city’s government-employed mandarins will get paid even more. Of course, they will have to drive up taxes, license fees, and penalties to pay for it. And as more people move away from a city that has fewer jobs and spiraling costs, an ever-shrinking tax base will be forced to pay for it. (And in addition to higher permitting costs and fees, if the contracts for SAG-AFTRA, DGA, WGA, IATSE, and other film industry unions have similar “prevailing wage” triggers, this will give the film industry even more reason to flee Hollywood to shoot their productions elsewhere.)
Once upon a time, the people of California must have been a marvelous bunch. I look at the wonders they left behind and think to myself, Wow, I would have loved to have met them. But their modern-day porridge-brained descendants are hell-bent on doubling down on Liberalism’s failures. I am beginning to fear they really will not be satisfied until this state actually does just fall off into the ocean…
Published in Domestic Policy, Economics
Elephas, does the proposed minimum wage hike applies only to the City of LA proper, or will if apply regionally?.
My understanding is that the greater LA area is made of a a number of small independent cities. Would a minimum wage hike just drive jobs, especially service jobs (and tax receipts) just across the LA border to a neighboring jurisdiction?
BTW, I just learned today the the Kubota heavy machinery/tractor company is exiting Torrance, CA, for Texas. Business, investment, and tax receipts are mobile.
Ouch. As a former resident of the great state of California, I can attest to the fact that not everyone who lives there is “porridge-brained.” As it is, it will by edifying to watch these cities take the leap and hike the minimum wage. I am sure we will all learn something from their endeavors. I don’t think they will have much success, and their citizens are going to have to deal with the consequences, but I much prefer they try this out at the local rather than state or national level anyways.
Refers to city council, so I assume it is the city of Los Angeles, and not the county of Los Angeles and it would not apply to other cities in the county or near by counties, e.g. Orange, Riverside, San Bernardino, Ventura, or Kern. But liberals control a lot of that space as well, so it’ll likely get worse before the final collapse into the Pacific
If it was the county, I would think there would be a reference to the Board of
StupidvisorsSupervisors for the county.Every story about the minimum wage cannot help but remind me of jobs I held as a youth, the crucial experience and valuable knowledge on how to handle money that I gained.
No one is going to give some completely inexperienced kid a chance at $15 dollars an hour, no one. So countless youths in LA are going to have that first rung on the ladder to success cut out from right underneath them, absolutely horrible. Only those who are complete fools are just plain vile can support this type of legislation.
Look for a lot of self-select menu pads, with orders cooked automatically by Robots, and a typical staff at a McDonalds might become: Owner/Manager, IT guy, robot tech, food loader, janitor, and table wiper. Staff shrink by half to 2/3rds.
John you’re spot on, although I think you may understate the effect of automation on staffing.
Assuming that the robotics are increasingly capable, reliable and that prices decline as manufacturing volume increases:
So eventually, staff levels down to 1/3 or less but per-person productivity soars, permitting higher compensation.
Most hurt by all of this? Here in Houston, McDonalds are largely staffed by young Hispanic and African Americans.
Although, if they choose to become those robotics techs, managers or experts at restaurant sanitation, they could also do very well. These will not be low skilled jobs.
Why just the people at the bottom? Why not raise all wages across the board by the same percentage? It would only be fair.
As others have said, it only applies to the City of Los Angeles, but one of the hallmarks of Liberalism is groupthink, so expect many of the neighboring cities to rush to mimic this nonsense just as they did with the equally dumb plastic bag ban. In fact, the People’s Republic of Santa Monica (a.k.a., Berkeley South) was ahead of L.A. on both proposals. San Francisco is, of course, all over the minimum wage hike, too, so if this is anything like the plastic ban bag, this could just be a precursor to the state legislature’s passing this foolishness as statewide law.
Yeah, there are still a few Republicans left here in the Free Lunch State, but those poor Conservatives are mostly clumped on the other side of the Coastal Range, sitting in the agricultural land the Tree Huggers with Full Swimming Pools have destroyed to save a worthless minnow and to let Governor Moonbeam play with his trillion-dollar train set. They could be dragged to the economic nuthouse whether they like it or not.
Clearly you are a smart Californian: You left.
I’ve lived here nearly sixteen years, and for sixteen years, I’ve watched a city and state electorate that just seems to get dumber and dumber with each passing year. (I keep asking myself, How did I leave Texas to move to California? It’s like seizing defeat from the jaws of victory.) As this state just sinks deeper and deeper into a fiscal and regulatory quagmire, the citizens of this state keep choosing to fix their increasingly broken state by making the same mistakes – but twice as hard! “Our Democrats needed to be more corrupt! Our taxes weren’t high enough! The red tape needed to be stickier!”
California’s collective problem-solving skills pretty much amount to this:
I grew up near Yosemite National Park, so my California experience was more rural, and in the part of the state that votes red. Victor Davis Hanson writes sometimes about the different realities in California.
I agree with you that California is badly governed, and many Californians cannot seem to resist voting for candidates with the big “D” next to their name. One nice experience about living in Ohio is that presidential candidates actually bother to visit and try to get our votes. They don’t really bother with California anymore. At least you are still there to battle bravely.
I just came back from a high school music competition in Anaheim, and was reminded that there were many things I missed about the place (I went to university in the Southland) and many reasons why I wouldn’t want to go back.
I have no first hand knowledge, but have read that union contracts are often based on minimum wage. So the basic starting wage for a union worker might be referenced as X% above or Y dollars over the minimum wage. So increasing the minimum wage is a backdoor increase for some unions as well.
Can anyone confirm or debunk?
As long as the feral government is in the hands of the left, or the GOP, California will have nothing to worry about. As long as Iowa and Louisiana, not to mention Texas, remain productive, there will be plenty of resources to siphon off to feed the sponge.
Yeah, it’s a big state and we don’t all live and think like those on the coast. I’m a transplanted Midwesterner who lives east of the Sierras (middle of nowhere no one envisions when they think “California”) and I love so much about this state. But it’s getting almost embarrassing to admit living here.
I wonder if by the government raising the minimum wage, if that could be considered a taking by the government?
An important note. Also, it’s important to note that the 14-17 year old population is highly unlikely to file for unemployment (most likely the college students won’t as well). Most of my progressive friends tout that raising minimum wage doesn’t affect unemployment numbers. Well that’s why, at least in the immediate term.
Even the liberal mayor of Minneapolis is smart enough to know that a $15 minimum wage would be a disaster for her city as she has beaten back efforts by the city council to impose one.
Roberto is right – this move will decimate the people on the bottom rung. Businesses will simply automate and make fewer people do more work, which means fewer entry level jobs.
Can someone speculate what will be the effect on those now earning this wage (30 thousand dollars/year) because they are actually worth it?
As the bureaucracy in Washington grows beyond any means control, I think your typo is a appropriate Freudian slip.
One cannot file for unemployment if one has not been employed for at least six months and has paid into the unemployment insurance program, which is why most people coming right out of high school or college are not on unemployment.
As for the minimum wage studies the Left quotes, most of them are from statistical samples that are, to be generous, unrepresentative. Politicians love to cite Santa Monica’s “living wage” law. Wedged between some of the most expensive real estate in the world, the town is a magnet for free-spending tourists and corporate offices for the likes of MTV Networks, HBO, RAND Corporation, and Silicon Beach stalwarts Twitter and Uber.
To claim that what works for Santa Monica can work for the entire state of California is akin to claiming that what works for Monaco can work for the entire world.
Older daughter is home for the summer after completing her 2nd year of college. At breakfast yesterday, before 7 a.m., she announces that her friend, C, is so angry about the new law that she texted my daughter around 6 a.m. to vent.
C’s furious because she knows young people are going to have an even harder time finding jobs. Now C comes from a single-parent household & money is very tight. She commutes to the local Cal State and works at a chain coffee bar. She needs her job to pay for school and doesn’t want to take out loans.
I look at my daughter and suggest that she encourage C to vote Republican.
Here’s the question: When C comes over, do I ask her what she thinks of L.A.’s new minimum wage law? I know her well enough to engage in a conversation.
I’d say yes. And maybe mention a few things like this:
Heh heh. Go type “feral government” into the search box at the top of this page.
Huzzah, Huzzah…
The age of the machine arrives.
That would be awesome!
Every college freshman taking Econ 101 knows after his first class session what occurs when one tries to set a price floor: The quantity of labor supplied exceeds the quantity demanded. Why do politicians act as if this simple and stubborn fact did not exist? Because they are dishonest, populist buffoons – that’s why. And how is a populace that deems state lotteries a viable way to plan for retirement supposed to understand the absurdity of legislating higher wages?
The vote by the city council was 14 to 1. I bet some of the proponents of the law are thinking “Dang, we should have asked for $18 an hour, maybe $20. If it passed that easily we obviously aimed too low.”
I find it astonishing that out of 15 people not even two thought this was a bad idea. I understand that Los Angeles means “City of Angels”. How do you say “City of Morons” in Spanish?
“Sacramento”
Pendejoville.