Calif. To Stick a Pin in Its Recovery Nicely with $10 Minimum Wage
Many parts of state still have double-digit unemployment
On Thursday, economists at UCLA noted that California's job recovery and growth is very lopsided. While unemployment in the state is dropping, the recovery is mostly in tech industry on the coast, well-paid jobs that require training. In the meantime, the state's manufacturing and logistics fields are stagnating or even declining.
Also on Thursday, the state's legislature voted to raise the minimum wage to $10 an hour by 2016, making it the highest in the nation. Via Reuters:
The bill, which Governor Jerry Brown said he will sign, would increase the minimum wage for hourly workers in the most populous U.S. state from the current rate of $8 an hour to $9 in July 2014, and to $10 by January 2016.
"The minimum wage has not kept pace with rising costs," Brown, a Democrat, said in a statement. "This legislation is overdue and will help families that are struggling in this harsh economy."
Brown, protective of the state's tenuous economic recovery, had initially opposed the bill but agreed to support it on Wednesday after leaders of both houses of the Democratic-led state legislature agreed to postpone the effective date of the raise until 2016.
I'm not exactly sure what they think is going to be so different about 2016 that makes this move suddenly acceptable. Perhaps businesses will lay people off in advance so when the day actually comes politicians can declare no major impacts following the increase (because they all happened before)?
Unemployment rates for inland counties in California are still in double digits. San Bernardino County is at 10.8 percent. The unemployment rate for agriculture-focused Imperial County (on the southern border of the state) is a whopping 26.1 percent (pdf). And these numbers don't include those who have dropped out of the labor force entirely so the real number is higher.
So the parts of the state most in need of unskilled, low-wage positions just to help families stay afloat are going to find them even harder to come by.
Also in the news are efforts to modify the state's abuse-inviting Environmental Quality Act (CEQA), which has made the construction of any new building in California nearly impossible or at least much more expensive than it needs to be. Legislators have been trying to reform CEQA, which is often used by labor and environmental groups (or just about anybody with an ax to grind) to force concessions (like labor agreements or land set-asides) or face lawsuits. CEQA is certainly a contributing factor in the challenge of building industry in those parts of California economists warn are still struggling.
Proposed reforms didn't make it through the legislature this year. But legislators did pass a bill that smoothed CEQA's impact on a new taxpayer-funded arena in Sacramento for the Kings. So that's nice for them.