California’s decision to raise the minimum wage to $15 per hour will cause more harm than good. The new law, which is meant to help working-class people, will actually hurt these people the most.
In Seattle, where the minimum wage has steadily increased and will soon reach $15, the availability of jobs is falling. In less than a year, nearly 15,000 people have lost their jobs; this has been the worst job loss in Seattle since the Great Recession. The repercussions in California could be far greater. Seattle has a relatively educated population in comparison to cities like Los Angeles, which implies that fewer people in Seattle depend on minimum wage jobs. While this proves true for some places in California, California also has a large population of young, unskilled workers. As the minimum wage increases, employers are given more incentive to move across local borders. Texas, two states away from California, has a minimum wage of $7.25. Companies, like the automotive giant Toyota, are already moving to Texas as the minimum wage in California increases. Thus, employees left behind are becoming jobless.
In addition to an incentive to move away from California, automating jobs is becoming increasingly attractive to employers. As employing unskilled workers becomes too expensive, cashiers, for instance, can easily be replaced by robots.
Also, businesses that are able to weather increases in the minimum wage will be forced to raise the costs of whatever commodities they offer. Restaurants that cater to low-income populations are also staffed by working class individuals. In order to support higher costs, restaurants will eventually have to increase their food prices.
So while everyone will indeed make more money, they have to pay more for everything they buy. While some effects of raising the minimum wage will take longer to come to fruition than others, the effects of raising it to $15 in California will largely be negative, as working class Americans will see their wages lose value.
Minimum wage, no doubt, has to be raised from time to time. Yet moving it from $10 — already one of the highest state minimum wages — to $15 is too drastic of an increase. Minimum wage was never meant to be a sustainable salary; no matter how high the wage floor is, it will remain challenging to support oneself and others on a minimum wage job. Instead, local municipalities and the United States Federal Government should focus on providing better opportunities in higher education, so that fewer people have to depend on the minimum wage as a means of survival.
Indeed, the minimum wage must not be raised throughout the country. While the raise makes sense in some areas where the cost of living is very high, such as San Francisco, for the majority of America the raise makes little sense. A worker for a small business in rural California has a much lower cost of living than one in a city. Therefore, the minimum wage should be lifted locally, not at the state level.
