Debating over the ever-arbitrary minimum wage law is nothing new
in politics, and neither is the myth that increasing the rate would
necessarily cause a negative economic impact.
Debating over the ever-arbitrary minimum wage law is nothing new in politics, and neither is the myth that increasing the rate would necessarily cause a negative economic impact.
Hollister Councilman Victor Gomez at a recent meeting broached the topic in light of Assemblyman Luis Alejo’s proposal to increase the state’s minimum wage from $8 to $8.50. He criticized the bill while contending it would hurt small businesses such as the one he owns in Hollister, Papa Murphy’s Take ‘N’ Bake Pizza. Gomez went as far as saying there would be fewer local high school and college students with jobs – because he’d have to fire them.
Using his personal example, Gomez asked for council members’ support on a resolution to officially oppose Alejo’s proposal in arguing that the timing, during an economic recovery period, is poor. For one, Mayor Pauline Valdivia echoed Gomez’s concerns while expressing angst about a wage increase’s prospective impact on her own employer, Jovenes de Antano.
Gomez, though, has yet to bring forward a resolution, and it should stay that way.
Raising the minimum wage to a more livable standard would put extra money in the pockets of people who tend to dispose of it – whether it be high school or college students, or adults trying to earn a living or merely get by. They are perpetual consumers, largely in the service industry, who spend the money they have, who don’t tend to have savings accounts or IRAs.
They also happen to do a lot of their shopping at the types of places that employ other minimum wage workers, such as pizza shops.
He argued during the meeting that the last minimum wage increase in 2008 resulted in the loss of about 45,000 jobs. He neglected to mention, however, that it occurred simultaneously with the start of the worst downturn since the Great Depression. Job losses sort of come with the territory.
Gomez was right in his contention that employer costs will increase. Naturally, there is an initial, added expense. But his view on a minimum wage increase, and its potential effect on businesses like his own, is short-sighted in that a hike should serve to stimulate the economy – and his registers – with the new infusion of cash.
And even with an added cost, such as additional Social Security taxes, Papa Murphy’s could and likely would pass it off to customers, as most businesses do. Other pizza restaurants, meanwhile, would face the same additional costs, because they employ workers in the same pay range.
It is, indeed, the right time to explore the appropriateness of California’s minimum wage – a figure that is eclipsed by those in other states with lower costs of living, such as Oregon and Nevada. It is, after all, arbitrary.
