Public Comment

California Lawmakers Propose a Shameful Minimum Wage Law

Harry Brill
Friday April 01, 2016 - 04:24:00 PM

The California Federation of Labor, which is the umbrella organization for California unions, expressed its enthusiasm for a tentative agreement reached by the Governor and State legislature to enact a $15 an hour minimum wage law. The current State minimum wage is $10 an hour. Although several cities within California have enacted a $15 an hour wage law, California would be the first State to do so. 

It would seem that only a cynic or a political sectarian would oppose the proposal. But despite the positive spin by the media a close look at the provisions should make us very nervous. The incremental annual increases of up to $15 an hour would not be reached until 2022, which is six long years from now. Moreover, small businesses (up to 25 employees), which make up the majority of California's businesses, will be given an additional year. 

To make matters worse, the $15 goal could be reached at an even later date and perhaps never. The reason is that the State's governor could put wage hikes on hold if there is an economic downturn, which is broadly defined. In effect, this provision gives the governor the power to virtually ignore the law. 

Also problematic is the failure of the tentative agreement to increase the State's sick paid sick leave law, which mandates a maximum of three days per year. But three days is not enough. As a result, many low wage workers who are ill feel compelled to go to work because they cannot afford to lose any pay. This jeopardizes not only their own health but also the health of customers and other workers. Yet The California Federation of Labor, rather than being critical, said it is pleased because the three day sick leave law is being maintained. But since the lawmakers will not increase the number of days of paid sick leave, the unions should be protesting rather than acquiescing.  

Clearly, the proposed law, which includes the governor's right to ignore it, is very hard to get excited about. So why are our public officials interested in promoting it? In fact, it is surprising since Governor Brown had been vehemently opposed to a further increase. He claimed that it would be too expensive for the State and the business community. Why. then, has he changed his mind? The best explanation comes from the Governor himself. As Governor Brown explains, "I think there will be very few business people lobbying against this bill, because they are just cutting their own throats."  

Governor Brown was referring to some stronger proposals that could be on the ballot in November. One of the ballot measures, which is sponsored by the SEIU Union that represents home caregivers and nursing home workers, has already obtained enough signatures for ballot status. The Union's president promised that the initiative would be pulled from the ballot after Brown signs the bill that he and the legislators have agreed on. Indeed, this is exactly what the lawmakers are attempting to accomplish. They want to discourage any serious pro-worker measure from being on the ballot or succeeding if it does appear.  

But the unions represent working people, and should therefore refuse to sign on unless the $15 an hour is reached much sooner, and the provision allowing the governor to bypass a wage increase is removed. With regard to the $15 an hour wage, an earlier date is achievable. According to the minimum wage laws in both Emeryville and San Francisco the $15 an hour wage will be implemented in 2018 That's four to five years sooner than what the California proposal mandates. 

In the SF Chronicle early this week the columnist Debra J. Saunders complained that increasing the minimum wage would be a job killer. Despite the evidence to the contrary, this mythology persists. That same claim is even made abroad. Germany, for example, recently adopted a minimum wage law, which resulted in employment increasing despite dire predictions from the business community. What is "conveniently" overlooked by the business community and their allies is the implication of good wages for purchasing power, which in turn encourages business to add more workers. We know that about 70 percent of domestic spending depends on consumers, who are mainly working people and their families. The higher their income, the more money they have to spend. 

To fully appreciate how low wages have adversely impacted the economy requires asking the right questions. The right and the most relevant question is "Has the tremendous erosion of spending power due to the failure of wages to keep up with inflation and productivity rates seriously hurt working people and the economy? The answer is yes, yes, and yes! If wages in 1968 had kept pace with inflation and the increase in labor productivity (how much workers produce) the hourly wage would have climbed from $7.25 to $26 an hour. Imagine how vibrant our economy would be if workers had received just their fair share and no more. Unquestionably, workers have been wronged for a very long while. So when working people struggle for higher wages, it is not only an economic matter. They are making a justifiable moral demand 

FDR during the 1930s depression understood and expressed the issue quite clearly: "No business which depends for existence on paying less than living wages to its workers has any right to continue in this country."