Tuesday, April 19, 2005

California Minimum Wage

The current minimum wage in Californis is $6.75/hour. That's less than $14,000/year for full-time work! Last year Gov. Schwarzenneger vetoed a bill to raise it.

Here is an opportunity to urge that the California minimum wage be raised.
In 1968, California's minimum wage stood at $1.65 an hour. For the minimum wage to match the purchasing power it had in 1968, it would have to be above $9.00 per hour. If the wage had kept up with productivity gains, it would be over $25.00 today. …

[This year's bill] would raise the state minimum wage from $6.75 to $7.75 over two years and then index it to inflation.

1 comment:

Matthew said...

Raising the minimum wage is not a fix-all solution to the problem of underpaid workers. By increasing minimum labor costs, employers would (obviously) be forced to pay more for their minimum-wage workers. This would in turn proportionally decrease the average number of workers an employer can afford to hire, increase the unemployment rate in that class of citizenry, and increase the quantity of output expected from each employee.

In the long run, to remain competitive manufacturing and certain service industries will be forced away from regions with high minimum wages, thus further complicating the already high demand for minimum-wage jobs in that area. Industries that cannot relocate will increase the price for their good or service, thus increasing the total cost of living in that region and further complicating the situation of low-paid or unemployed workers.

I agree that $14,000 in annual income is not enough, but perhaps raising the minimum wage is not the best solution?