Analysts React to California’s Proposed $15 Minimum Wage: ‘A Blunt Approach’
ENLARGE
Workers hold a rally last year in Los Angeles in support of a proposed county minimum-wage ordinance. On Saturday, California lawmakers and labor unions reached an agreement that may take the state's minimum wage from $10 to $15 an hour. Photo: NICK UT/ASSOCIATED PRESS
By
Eric Morath
Mar 28, 2016 11:54 am ET
Whether California lawmakers’ plan to set a $15 an hour minimum wage will provide an economic boost or blow to the nation’s most populous state is dividing experts. At $10 an hour, California already is tied for the highest state minimum wage in the country. The pending action would lift the state’s pay floor to a level only previously approved in large, and expensive cities, such as San Francisco, Los Angeles and Seattle. Here’s how economists and analysts reacted to the plan.
“California seems to be taking much more of a blunt approach instead of embracing innovative proposals we’re seeing out of places like Oregon, which tiered their minimum wage based on geography. $15 an hour may work in places like San Francisco or Los Angeles, but it could have very different economic effects in some of the very rural areas in the state. For example, El Centro, Calif., has costs more than 30% lower than San Francisco or Los Angeles.” —Gabe Horwitz, Third Way
“It’s a huge signal that Congress needs to step up and do something at the federal level.…The fact that advocates are targeting levels beyond what we’ve done before, and winning, reflects people’s frustration with the lack of any effort to deal with the problem of wage stagnation at the federal level.” —David Cooper, Economic Policy Institute
“Rising minimum wages will hurt the hiring of the least-experienced, least-skilled and lowest-wage workers. That means it hits more harmfully in the lower-wage rural areas, as well as in the retail, restaurant and bar sectors. It is also not a good antipoverty policy—our estimate of a nationwide increase to $15 is that only 7% of the benefits of higher wages go to those in poverty.” —Douglas Holtz-Eakin, American Action Forum
“The Fight for $15 is winning historic changes no one would have thought possible just a few years ago. California’s $15 minimum wage will mean big raises for more than one in three workers in the state, reversing years of falling pay.” —Christine Owens, National Employment Law Project
“California may be the first state to pass a $15 minimum wage, but it will also be the first to find out why that’s a bad idea. Dramatic wage mandates are already forcing difficult decisions in relatively wealthier areas, with low margin businesses being forced to lay off employees or close entirely.” —Michael Saltsman, Employment Policies Institute
RELATED
California Moves Toward $15-an-Hour Minimum Wage
Oregon Just Set a New Minimum-Wage High. Here’s Where Your State Stands(March 2)
One Solution for the Federal Minimum Wage: Five Minimum Wages (Feb. 11)
Do Minimum-Wage Boosts Reduce Reliance on Government Assistance? (Dec. 18, 2015)
Small-Business Owners Split on Raising Minimum Wage (June 12, 2015)
Workers hold a rally last year in Los Angeles in support of a proposed county minimum-wage ordinance. On Saturday, California lawmakers and labor unions reached an agreement that may take the state's minimum wage from $10 to $15 an hour. Photo: NICK UT/ASSOCIATED PRESS
By
Eric Morath
Mar 28, 2016 11:54 am ET
Whether California lawmakers’ plan to set a $15 an hour minimum wage will provide an economic boost or blow to the nation’s most populous state is dividing experts. At $10 an hour, California already is tied for the highest state minimum wage in the country. The pending action would lift the state’s pay floor to a level only previously approved in large, and expensive cities, such as San Francisco, Los Angeles and Seattle. Here’s how economists and analysts reacted to the plan.
“California seems to be taking much more of a blunt approach instead of embracing innovative proposals we’re seeing out of places like Oregon, which tiered their minimum wage based on geography. $15 an hour may work in places like San Francisco or Los Angeles, but it could have very different economic effects in some of the very rural areas in the state. For example, El Centro, Calif., has costs more than 30% lower than San Francisco or Los Angeles.” —Gabe Horwitz, Third Way
“It’s a huge signal that Congress needs to step up and do something at the federal level.…The fact that advocates are targeting levels beyond what we’ve done before, and winning, reflects people’s frustration with the lack of any effort to deal with the problem of wage stagnation at the federal level.” —David Cooper, Economic Policy Institute
“Rising minimum wages will hurt the hiring of the least-experienced, least-skilled and lowest-wage workers. That means it hits more harmfully in the lower-wage rural areas, as well as in the retail, restaurant and bar sectors. It is also not a good antipoverty policy—our estimate of a nationwide increase to $15 is that only 7% of the benefits of higher wages go to those in poverty.” —Douglas Holtz-Eakin, American Action Forum
“The Fight for $15 is winning historic changes no one would have thought possible just a few years ago. California’s $15 minimum wage will mean big raises for more than one in three workers in the state, reversing years of falling pay.” —Christine Owens, National Employment Law Project
“California may be the first state to pass a $15 minimum wage, but it will also be the first to find out why that’s a bad idea. Dramatic wage mandates are already forcing difficult decisions in relatively wealthier areas, with low margin businesses being forced to lay off employees or close entirely.” —Michael Saltsman, Employment Policies Institute
RELATED
California Moves Toward $15-an-Hour Minimum Wage
Oregon Just Set a New Minimum-Wage High. Here’s Where Your State Stands(March 2)
One Solution for the Federal Minimum Wage: Five Minimum Wages (Feb. 11)
Do Minimum-Wage Boosts Reduce Reliance on Government Assistance? (Dec. 18, 2015)
Small-Business Owners Split on Raising Minimum Wage (June 12, 2015)
