Assembly Bills 10 and 400: Would Raising Minimum Wage, Adding Paid Sick Days Hurt the California Economy?

By Simone Wilson Thu., May 26 2011 at 4:40 PM

libcom.org

Would you take this job for an extra 50 cents?

While the State Assembly committee readies itself to vote tomorrow on San Francisco Assembywoman Fiona Ma's proposals to 1) increase minimum wage from $8 to $8.50 and 2) allow for nine paid sick days per year in the California workplace, a battle of the studies rages on between businessfolk who think the bills will tank the economy and workers' advocates who insist they won't.

The National Employment Law Project presented UC Berkeley-hashed numbers in April that showed upping minimum wage did not lead to layoffs and unemployment. But the Employment Policies Institute says those numbers are bogus -- the result of a man-made equation that uses so many controls it stops mimicking reality.

The first study argues:

"Boosting the earnings of low-paid workers reduces turnover and absenteeism while increasing morale and productivity, creating efficiencies for employers that offset a substantial portion of the higher wage costs."

Sounds kinda overoptimistic, if you ask us. The California Chamber of Commerce agrees, calling the minimum-wage boost a bona fied "job killer." (Along with a proposed bill that would protect stoned employees with medical excuses, and one that would mandate days off for being depressed. Uh -- yes please.)

Voting for higher wages and more sick days would be the Assembly's easy, feel-good option. But if what the Chamber says is true, we must ask: At what point should workers' rights be compromised in the name of overcoming the deficit?

It's a little like the furloughs-versus-layoffs question. Should we protect the well-being of the few or maintain a bare minimum for the many?

For the Employment Policies Institute, there's no question that the economy as a whole should come first. From their presser:

"Many impacted employers have low profit margins, so for each dollar in revenue, only a few cents are made in profit--meaning there's not a lot of leeway for added labor costs," said Saltsman. "This is especially true among employees already earning the minimum, and could cause job loss among this vulnerable group."

We've contacted Assemblywoman Ma for comment. But what do you think: are AB 400 and AB 10 really just "job killers" disguised as gifts to the working class?

[@simone_electra/swilson@laweekly.com]

Tags:

AB 10, AB 400, economic impact, Fiona Ma, minimum wage, paid leave, recession, sick days, State Assembly, unemployment

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oyezoyezoyez

Wow. A blatantly slanted opinion piece disguised as a newsy post.

Here's what I read: Blah blah blah, this liberal study says this but it cant be true. Blah blah blah but here's this study done by some biz folks so it must be true. Blah blah blah is this legislation really a horrible as i think or is it worse?

Here's another fact: San Fran, which has a city-wide minimum wage, mandatory health insurance requirements and a paid sick days requirement was just named a top 5 "City of Innovation" IN THE WORLD.

http://www.bnet.com/blog/manag...

Thanks for the 'fair and balanced' post.

Bd1161

AB 10 the bill is raise the minimum wage is by Luis Alejo not Fiona Ma.

Frawsty

Bd1161 - You are correct that Assemblyman Alejo wrote AB10. So then my opinion changes, Assemblyman Luis Alejo should be the one immediately voted out of office for incompetency and stupidity. Let the people who like raves vote out Assemblywoman Ma.

Bd1161

AB 10 is by assemblyman Alejo not Ma. http://leginfo.ca.gov/pub/11-1...

Frawsty

So the unemployment rate in California is currently 11.7%, off the high of 13% in Jan. 2010, and way ahead of 4.4% in June 2006. How does our state government fix such a horrible unemployment rate, why raise the minimum wage, and add more sick days. Assemblywoman Ma should be immediately voted out of office for incompetency and stupidity.

thomasjcoleman

But as we know, the federal minimum wage law was enacted just as America was emerging from the Gread Depression and has worked very well over the years. The more people earn, the more they spent, cleaning out the backed up warehouses and getting the economy moving again. Assemblywoman Ma seems to understand this, but apparently you don't. Maybe you should be "voted out" if you would only be so good as to give us your full name!

Frawsty

Economics 101-If a higher minimum wage increases the wage rates of unskilled workers above the level that would be established by market forces, the quantity of unskilled workers employed will fall. The minimum wage will price the services of the least productive (and therefore lowest-wage) workers out of the market. ... The direct results of minimum wage legislation are clearly mixed. Some workers, most likely those whose previous wages were closest to the minimum, will enjoy higher wages. Others, particularly those with the lowest prelegislation wage rates, will be unable to find work. They will be pushed into the ranks of the unemployed or out of the labor force.Sorry Thomas, but I have a great understanding of how the minumum wage works. Assemblywoman Ma needs to be re-schooled by voting her out. As for me, I am not an elected official, so there is no voting me out, and as for my full name, for you...it's Frawsty.

Briansays

and you wonder why jobs are going to Texas

thomasjcoleman

Actually Brian Anonymous, not many jobs are going from here to Texas, and we also get some from there, so apparently you're drinking the Cali Chamber Kool Aide. Unless you're filthy rich yourself (for all we know you could be Donald Trump), why be such a sap about this? Also the jobs there tend to be low skill, low wage, and the Lone Star State is suffering from it's own yawning budget deficit.

thomasjcoleman

I'm sure it has to sound "kinda overoptimistic" to you, in accord with the fat cats at the Cali Chamber of Commerce. If you said otherwise, if you cited objective studies that demonstrate the benefits of modest increases in the minimum wage (rather than quoting an "Institute" that looks to be just another a pimp-paid lobbyist shill for the grossly overpaid, low or no taxed big bosses), or noted that the federal minimum wage was enacted during the Great Depression and lifted millions out of poverty (contrary to the shrill, dire warnings from the captains of commerce then and ever since--this transparent, self-serving jive talk is really getting old, isn't it? But of course the big money has always been on their side, now more than ever), you would likely have "problems" from your own employer, no?