California apparently sees itself as the bellwether that must lead the rest of us to the great new world. That new world is going to include a minimum wage of $15/hour by 2023. That this will cost, according to a recent study, some 400,000 jobs seems to have had little if any impact. Somehow the reasoning must be that California will find its way to this nirvana of societal income. Not to worry that it doesn’t add up.
It is expected to cost Californians some 400,000 jobs when it is instituted. The law has a minimum wage of $11.00 per hour effective January 1, 2018. That will increase by $1.00 per year through 2022. Where employment was expected to increase by 1.4% per year, the new reality calls for an increase of one-tenth of one percent or 13,000 new jobs by 2023.
Those who, obviously, must be much smarter than we tell us ‘not to worry’. It will work just fine. Of course, more automation will result, and that means fewer people will be needed, but it’ll all come out in the wash, so to speak. Think for a moment of all the people with whom you interact that are likely at the lowest rung on the wage ladder, and think about what will happen as those people find themselves squeezed out of a job due to the economic impact of this kind of increase.
Will automation have taken over for all those now unemployed? Will all Starbucks’ become self-serve, for example? Are you capable of being your own barista? How about all the cashiers in the supermarket? Will everything be packaged and pre-priced so that we can scan and run? What happens in those situations where you wanted to get four wieners instead of the pre-packed dozen? Or where you wanted the person behind the counter to cut about a two-inch slice of cheese?
Where will the recently terminated minimum wage employees go for their next entry-level job? There won’t be anywhere to go since this will be uniform across all employers throughout California. What happens as the unemployment numbers increase and the costs of providing unemployment checks monthly increase more rapidly?
That will assuredly happen. Fewer people working at those lower level jobs that will be eliminated results in higher unemployment which results in more unemployment comp being paid. If that doesn’t happen, the next thing to happen will be an increase in petty crime, and then in higher forms of crime. Welfare cost increases will be rising at higher rates given the numbers making application. If that doesn’t occur, crime rates will go higher since that will be the only solution for more and more people.
The idea that a minimum wage of $15 per hour will not have an immediate and significant impact on the number of unemployed and the resulting ripple impact of that group becoming larger and larger is simply off the mark. It sounds as if this was spawned by a liberal think tank. That is the only place that could’ve come up with this kind of ‘solution’.
Then we come to what those of us in the rest of the country will be expected to contribute to help solve California’s self-created dilemma? Only in California could we see this ‘solution’ being spawned. At least I hope only in California. The rest of us will get pulled into this even though we might go screaming and kicking.
There will be a need for federal funds to assist in this folly, and the full California contingent to Congress will raise the hue and cry. And then the other left-leaning gravity defiers will chime in, and there will be some kind of reconciliation bill in order to prevent Congress from shutting down.
Maybe the next effort in California will see a law passed that mandates water to flow uphill without pumping. That would save a lot of money, too.