Gov. Brown opposes CA minimum wage hike

ohadby / flickr

ohadby / flickr

Opening another fissure with members of his own party, Gov. Jerry Brown has come down on the opposite side of a proposed statewide increase in the minimum wage.

Changing course

In an indication of the mood in the governor’s office, Brown’s number-crunchers came down hard on the proposed hike. Kristin Shelton, the state’s budget program manager, said the Department of Finance opposed the bill “because it results in significant, unbudgeted costs to the General Fund,” according to Bloomberg Politics.

“She said the proposed minimum wage would have a negative impact on California’s economy, though losses from higher production costs to businesses would be partially offset from additional spending by minimum wage workers.”

As Bloomberg noted, the finance department has calculated that an additional increase of $1 in wages above what Brown signed into law two years ago “would cost the state almost $400 million this fiscal year in higher wages paid to in-home health care workers, seasonal park employees and other state staff making minimum wage.”

SB3, introduced by state Sen. Mark Leno, D-San Francisco, “would raise California’s minimum wage to $11 in 2016 and $13 in 2017, then tie the minimum wage to inflation starting in 2019,” according to the Washington Times. “He says his bill is needed to keep up with the cost of living and help low-wage workers make ends meet. It already passed the Senate.”

Yet Brown has refused to praise the idea. “At a recent luncheon attended by representatives of private industry, Brown touted the 2013 state law that will automatically raises minimum wage to $10 in 2016 as a sign of economic progress;” but, as the Sacramento Business Journal reported, Brown “did not mention the pending legislation to raise it further.”

Republican agreement

The California GOP quickly found itself in the now-familiar position of offering cautious praise for the governor, who has earned Republican kudos for holding a sometimes hard negotiating line against ambitious state Democrats eager to spend larger portions of the Golden State’s surging tax revenues.

“We have to find a way to help create jobs to lift our lowest income families out of poverty and expand the middle class,” said Senate Minority Leader Bob Huff, R-San Dimas, according to the Los Angeles Times. “The Governor’s Department of Finance correctly points out yet another increase in minimum wage would lead to slower personal income growth for low income families.”

A showdown approaches

Brown has faced a concerted push by legislative Democrats to follow their lead on mandatory wage hikes. “New legislation in California would protect cheerleaders for professional sports teams from receiving low pay that some in the industry say amounts to less than minimum wage,” as Time reported. “The bill, the first of its kind in the nation, passed the California State Senate Monday and awaits the signature of Governor Jerry Brown.”

In a statement, Assemblywoman Lorena Gonzalez, D-San Diego, the bill’s author, framed the legislation as a matter of human rights. “Everyone who works hard to provide a great game day experience deserves the same basic level of dignity and respect on the job, starting with simply being paid for their work,” she said.

Business reacts

To the chagrin of Democrats to Brown’s left, his current posture has now put him closer to the Chamber of Commerce — long associated with Republican polices on finance and the economy. But their push to increase the statewide wage, fueled by significant hikes in big Golden State cities where Democrats predominate, has been blunted in part by the reactions of businesses themselves.

In San Francisco, for instance, the popular Chipotle chain of fast casual Mexican food has ratcheted up prices — “in part to offset higher labor costs,” according to spokesman Chris Arnold. “California, and San Francisco in particular, has a high cost of doing business,” he said, according to the Chicago Tribune. Arnold said that because occupancy costs are “about double the Chipotle average as a percentage of sales,” wage hikes can take an outsized toll.

11 comments

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  1. Ronald Stein
    Ronald Stein 16 July, 2015, 06:29

    Raising the minimum wage will obviously increase costs everywhere, but the unintended consequence of this movement will benefit the rich more than those on minimum wage via those Cost of Living Adjustments in the years ahead. Yes, the separation of the rich from the financially challenged continues to be perpetuated with the “traditional” COLA wage adjustments and over regulations on businesses.

    Cost Of Living Adjustments (COLA) to wages favors the well paid: A 3% COLA adjustment for someone making $100K= $3,000 more per year, but for someone making $20K=$600 per year. Is it fair to give a COLA adjustment to someone making the big bucks $2,400 more than the person making lower wages for “their” cost of groceries, housing, utilities, transportation, and health care? These higher wage folks are eating similar foods and using the same fuels for their cars as those making fewer wages.

    But wait, another unintended consequence associated with the upcoming minimum wage increases will be a great way to incentivize kids to drop out of school. Imagine the carrot of a huge minimum wage of a $25 to 30,000 a year minimum wage as a reward for no higher education. It may be better to stop beating up on businesses with over regulations, over taxation, and uncontrollable “fees” that are slight inconveniences to those making the big bucks, but the California financially challenged will continue to disproportionally pick up the costs “camouflaged” at businesses, and remain behind the eight-ball on the COLA wage adjustments that will benefit the rich more than those on minimum wage.

    Reply this comment
  2. Queeg
    Queeg 16 July, 2015, 08:28

    Should be noted consumers will have less product or service differentiation.
    Color, style, size, hours open, response to queing, human contact/interelations.

    Immediate productivity will be emphasized negatively affecting low skill or new entry employment candidates.

    Your life just will be safe and comfortable doomers!

    Reply this comment
  3. fredtyg
    fredtyg 16 July, 2015, 10:01

    “…would cost the state almost $400 million this fiscal year in higher wages paid to in-home health care workers, seasonal park employees and other state staff making minimum wage.”

    I get the impression they’re not taking into consideration that state employees making more than minimum wage will likely get pay increases, too. Most of those agreements between public employee unions and government have some agreement that if the minimum wage employees get raises, those above them get more to compensate.

    Reply this comment
    • michael
      michael 16 July, 2015, 10:55

      True why not offset the $400 million to the bottom level with corresponding cuts to those at the top? Including the Governor and legislators? How about a little swipe off those pensions as well. How about following your own rhetoric, in other words.

      Reply this comment
  4. Queeg
    Queeg 16 July, 2015, 10:50

    Comrades,

    Will you get a cherry, touchy feely wage increase from your beloved plutocrats?

    California is loaded with slaver managed , dead end, low ender service jobs that have only a itsy bitsy chance at any productivity increases, ever.

    This will not end well. Anything that is artifical ain’t good for you.

    Reply this comment
  5. Teddy Baby MD
    Teddy Baby MD 17 July, 2015, 17:51

    and the tea baggers continue to complain! lmao

    Reply this comment
  6. desmond
    desmond 17 July, 2015, 18:38

    Ted Queeg the Ahaul,
    Cease, Desist, and go meet Lucifer at your final home.
    Note, to all, there will be a response with one hand from “those” addressed, while the other hand attempts the impossible.

    Reply this comment
    • Ted
      Ted 20 July, 2015, 13:47

      you mean register Republican with the other hand?

      LMAO
      it’s just this easy folks!

      Reply this comment
      • Ulysses Uhaul
        Ulysses Uhaul 20 July, 2015, 17:43

        Teddy…. Despotty is deeply hurting. His formulative years must have included dutifully watching “B” horror and scii fi abduction flicks with Crazy Uncle Louie while eating Valveeta on Wonder Bread sandwiches. Terribly constipating for the lad…..why on earth was he abused so?

        Reply this comment
  7. desmond
    desmond 20 July, 2015, 19:07

    TedbQueeg the Ahaul, nope, you won t vote Republican, but singlebating is your fav aerobic .

    Reply this comment
    • Teddy
      Teddy 21 July, 2015, 19:59

      Poor Desi-potti’s lexi-jargon is still….ah…er….well…hate to be cruel, but, unintelligible.

      Reply this comment

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