Gov. Jerry Brown signed bill AB 10 into law in September, increasing the minimum wage to $9 by July 2014 and $10 by January 2016. This will give California workers the highest minimum wage levels in the nation, well above the federal minimum wage of $7.25 per hour.
President Barack Obama also proposed to increase the federal minimum wage to $10.10 in February. However, the proposed wage increase has been stalled by Republicans in Congress, who have filibustered. At the moment, Democrats do not have enough votes to push the bill through.
The effects of this increase are still somewhat unclear, whether it will help families living below the poverty line or end up hurting businesses. Republicans say that employers will have to cut jobs in order to keep up with the cost increases therefore further contributing to the state’s high unemployment rate. Democrats on the other hand say that the wage increase will help millions of low-wage workers in a state with the highest cost of living.
The nonpartisan Congressional Budget Office found that the federal minimum wage increase could possibly eliminate over 500,000 jobs for low-wage workers by mid 2016 but also lift about 900,000 families above the poverty threshold (out of the 45 million who are currently living below the poverty line).
According to USA Today, close to two-thirds of minimum wage workers are employed in the food preparation or food service industry and about half are under the age of 25.
Individual cities across the country often raise their minimum wage in order to keep up with the high cost of living, such as San Francisco as well as suburbs of Seattle and Washington D.C.
In Seattle, Mayor Ed Murray is attempting to push through an executive order to raise the city’s minumum wage to $15 per hour. The increase would be phased in over seven years.
Jenelle Ulibarri, nursing major, thought that increasing the minimum wage is a good idea.
“The cost of living around here is so expensive. Low-income workers with families could really use the help and many students also provide for their families working for just minimum wage,” Ulibarri said. “Even students without a family of their own probably wouldn’t mind the raise.”
Andrea O’Loughlin, child-development major, was somewhat unsure about the issue.
“It does seem like a good thing because living in Southern California is so expensive but how long will it take before inflation makes everything else expensive in response?” O’Loughlin said. “I guess individual businesses and employers will just have to respond to it as they see fit. But if you look at San Francisco, their minimum wage is already really high and here in Orange County we think it’s great but just look at the outrageous cost of living in a place like that.”
Francis Mummery, chair of the economics department and economics professor, is opposed to increasing the minimum wage based on its many negative consequences. He said that the small economic recovery we are seeing now is not a good time to increase the cost of labor to employers.
Mummery pointed out that college students will be among the first to go if jobs are cut due to the wage increase.
“If an employer is going to have to pay employees more, the employer is going to want to get the most skilled and experienced workers possible,” Mummery said. “Unfortunately, this means that many younger workers are either not hired, or those that are employed, lose their jobs.”
“It is unfortunate that the minimum wage has so many negative consequences,” Mummery added. “It does benefit some workers but only those that manage to keep or get the reduced number of jobs available. It also sounds good for a politician to indicate he or she cares about people. You will never hear a politician say, ‘I’m going to raise the minimum wage, and force some of you to become unemployed.’ Which is sad, but true.”