(CA Gov.) Brown backs minimum wage boost

[alp227]

Source: UT San Diego

Gov. Jerry Brown has endorsed legislation to raise the minimum wage, clearing the last major hurdle to bigger paychecks for millions of Californians while forcing business to absorb increased payroll costs that could be passed on to consumers through higher prices for everything from hamburgers to clothes.

Acting on the governor’s signal, the state Senate and Assembly are expected to pass legislation Thursday that would increase the minimum wage by $1 per hour on July 1 and by another dollar on Jan. 1, 2016. The current floor in California is $8, which has held steady since 2008.

The measure, which is expected to be approved by the Assembly Thursday, was recently amended to speed up the increase. Initially, the wage was to climb more incrementally, starting at $8.25 on Jan. 1, reaching $9.25 in 2016 and before topping out at $10 in 2018.

“The minimum wage has not kept pace with rising costs,” Brown said in a statement. “This legislation is overdue and will help families that are struggling in this harsh economy.”

Read more: http://www.utsandiego.com/news/2013/sep/11/minimum-wage-boost-brown/all/

[gopiscrap]

1. 10.00 isn't enough, it should go to 15.00 an hour.

[Politicalboi]

2. And now

Not 5 years down the road.

[gopiscrap]

15. Exactly!!!

[TheDeputy]

3. Perhaps

“The minimum wage has not kept pace with rising costs,” Brown said in a statement.

Nothing happens in a vacuum. Costs will go up negating the advantage of a higher minimum wage. Perhaps spending money on trade schools and job training would do a better job of raising wages.

[Aladeen2016]

4. So...

you're pushing the fallacy that education creates jobs?

[TheDeputy]

5. So,

You are pushing the fallacy that education doesn't lead to higher paying jobs?

[Aladeen2016]

6. Well...

no, education doesn't necessarily lead to better jobs the past few years, and there is no sign of this changing.
Do you live under a rock?

[TheDeputy]

8. The past few years.

Historically it does. Have you been living under a rock?

[David__77]

14. That's precisely why we need higher minimum wages.

Preferably coupled with more tuition/student assistance. We as a society should have a preference for more productive, skilled labor. The minimum wage is a public policy aimed at ensuring that proprietors economize on labor, which is a precious resource to society. Indeed, imposition of minimum wages historically corresponded with increased levels of economic growth and capital-intensity.

[TheDeputy]

17. You make a good argument.

I will have to consider it. Thanks.

[xfundy]

9. Cancervatives say that often.

Of course, how are they going to live and eat if they're in school and making minimum wage?

Personally, I'm lookin' forward to the

[TheDeputy]

10. Student loans perhaps?

Skills are good to have. I got a better job by going to my local vocational school and learning. Now I raise two daughters as a single dad.

[David__77]

12. Let's unpackage this...

"Costs will go up negating the advantage of a higher minimum wage."

This statement is only partially correct. Of course, a portion of the additional labor costs will pass through to consumers in the form of higher prices; however, a portion of the increased costs will result in fewer profits being taken as well.

Adherents of neo-liberal economics tout the role of profit in driving innovation and economic development, but there is another facet of profit that must be emphasized - vampirism. Economic profit taken as profit is unproductive - it could instead be either reinvested in developing physical or human capital, or in the form of wages which will stimulate economic growth through creating demand for goods and services.

But there is a more important issue at stake: what kind of jobs do we as a society want? Do we want people employed in jobs that the "free market" would price at $8 per hour? What about $4 per hour? 2? Setting a floor on wages most certainly interfere in the market, and for a good purpose: establishing a preference for job creation requiring higher level of human capital. Ideally, we would have a very highly skilled work force in a capital-intensive economy, with no such thing as "unskilled labor" or the equivalent "entry-level" positions. The minimum wage creates a preference for more productive labor. A "job" is not a job is not a job.

[CreekDog]

18. you're saying that a 20% rise in wages for those working minimum wage will...

result in an increase in all their other expenses that eat up that entire increase?

this does not happen.

[The Straight Story]

19. I think you are missing something in your equation

Costs may go up indeed - but people are producing more now than ever before and the cost per widget may only need to go up 1-5 cents to keep the profits at the same level.

Now companies are continually reducing costs (going green, cutting electric usage, etc and so on) but they don't pass those savings on to consumers nor in the form of higher wages.

If employees make you more money there is nothing wrong with those people, like any investor, to ask for more of that pie (some see that as greed when workers do so but not when ceo's/investors do so - and the people are the ones doing the work to make the profit).

Many countries have a higher minimum wage and it puts more money into the pockets of people locally whereas more with the wealthy investors gets sent away to places like Vietnam, China, etc - depressing wages here is akin to raising prices (you will notice prices tend to increase over time anyway).

[Sunlei]

7. good the 9 for the state,will match the 9 for the Federal minimum if that ever is passed by Congress

[cstanleytech]

11. I fear though that this might be a wasted effort.

No, I am not saying that people like grocery clerks and cashers dont deserve a raise but my main concern is that businesses will just hike their prices which will just set it back to zero for all intents and purposes.
What is really needed imo is implementing a new tax on businesses that hits in their profits so the bigger the gap in pay between the lowest paid and highest paid for the company the bigger the tax the business pays and the smaller the gap the lower the tax, that way maybe companies wont keep screwing over average person as much.

[David__77]

13. How does this make sense?

"businesses will just hike their prices which will just set it back to zero for all intents and purposes..."

How is that sensible? Even if we were to assume that the entire cost of higher wages passes through the consumers (a proposition with which I don't agree), how would this entirely mitigate the benefit to minimum wage workers? Every consumer purchases goods and services associated with some mix of minimum wage and non-minimum wage labor, as well as the costs of materials which are in turn to varying degrees affected by wage levels). Since, say, a $2 increase in the minimum wage does not result in everyone getting a $2 raise, and labor costs entirely being passed through in the form of higher prices, how are minimum wage workers not better off (and some proprietors not worse off)?

[cstanleytech]

16. Because the company wants to keep its profit margin the same so to offset the higher costs they

will do two things, cut worker hours and raise prices.
If you address it though via a tax based on the income gap itself though the company loses the incentive to screw people as much and workers will earn more.

[alp227]

20. UPDATE: The min wage increase has passed the legislature!

http://www.mercurynews.com/popular/ci_24083554