Gov. Brown Admits $15 Minimum Wage Does Not Make Economic Sense, Approves It Anyway
A shrug in the direction of California's poorer counties
California Gov. Jerry Brown simply does not care about what will happen to citizens in non-urban parts of the state under a $15 minimum wage.
He didn't literally say that, but what he did say when today was that he understood that there may be some bad outcomes for such a massive, unprecedented mandate. And then he signed it into law anyway.
Here's the quote of what he said. Look for one little adverb that indicated (probably accidentally) exactly why the law was passed, even though Brown has previously been resistant to it:
Economically, minimum wages may not make sense. But morally, socially, and politically they make every sense because it binds the community together to make sure parents can take care of their kids.
The key word is "politically." Politics don't hold communities together. But they can keep entrenched interests in power.
Read more from Brown's signing here, my analysis (and others) on the potential terrible impact of the increase here and here (including interactions with California labor law that nobody is even talking about), and note that New York Gov. Andrew Cuomo also signed a $15 minimum wage law today.
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The minimum wage increase may help Janet Yellen reach her inflation target.
It also helps corporate behemoths deal with their pesky mom-and-pop competitors.
I’m sure that’s what Jerry means when he says it “binds the community together”. As in, it binds the labor market to fewer, larger firms who have lower overhead per employee.
And maybe he thinks of “parents” as those entities, and “taking care of their kids” as giving them fewer employment options so they have less bargaining power and stay on the plantation.
There is nothing, however, remotely moral about the minimum wage.
The Restaurant Wars toss-off in Demolition Man makes a lot more sense now, though.
It also helps corporate behemoths deal with their pesky mom-and-pop competitors.
And won’t it be ironic when all these idiots have a fit that all of the niche mom-and-pop businesses have been replaced with big box stores? Something tells me they won’t put 2 and 2 together, though.
Of course they won’t. They’ll scream about market failure and demand that government do more.
Subsidies they’ll want, betting I am.
—Subsidies they’ll want, betting I am.—
Which will go to the very same corporate behemoths that eliminated the mom-and-pops, of course, which will lead to more calls for more government.
…and so on, and so on, and so on.
They already bitch about that all the time in light of all the other regulations they support which make it prohibitively expensive for a small business to operate.
Something tells me they won’t put 2 and 2 together, though.
If they could do math, they wouldn’t support the minimum wage in the first place.
The complete irony is that local communities were almost exclusively “mom and pop” before the advent of the minimum wage. Price/labor fixing seems to beget larger economies of scales and large economies of scale have problems (legally and practically) being flexible to set prices at different rates in different markets. The result is that labor becomes disproportionately more expensive in rural areas than urban areas, but urban concentration drives up prices of goods and services in urban areas. It results in a poverty – intervention feedback loop. Soon people will blame the “concentration of the means of production” in large companies and will demand that assets be shared communally.
Can’t you think globally?
I’m pretty sure Obama made a similar comment about tax increases on the very wealthy.
The comment was about capital gains taxes. The interviewer said that studies showed increasing cap. gains taxes didn’t increase revenue; President Obama said he knew but was for them anyway because ‘fairness’.
He is also good a succinctly stating the progressive school of “economics.”
Because harming people economically is somehow a good thing morally and socially…?
If your moral and social goal is to get more people dependent on welfare, and thus voting for democrats, then yes.
What’s the old saying about the first rule of politics being to ignore the first rule of economics?
Yeah.
But morally, socially, and politically they make every sense because it binds the community together to make sure…
…we keep a voter base.
it binds the community together to make sure parents can take care of their kids.
Well, via the welfare system when they lose their jobs to the $15 minimum wage, sure.
Winning.
You gotta break a few eggs to make an omelet. If you’ve never seen an omelet, you’re probably a broken egg. Broken eggs don’t get omelets. People that break eggs get omelets.
People that break eggs get omelets.
This.
Well, it used to be that you didn’t have to break eggs to get an omelet, because there was a cook in the kitchen who did that for you.
With this new minimum wage, though, who can afford a cook?
Keep the cook and get rid of the waitstaff/hostess/cashier. Also, the cook is now the manager and the customers bus their own tables.
I know Cuomo leans way more evil than stupid, but what about Brown? He just seems so stupid it’s hard to believe he has much evil in him.
Behold, he is Homer Simpson.
Brown is not stupid. Make of that what you will.
He fucked Linda Ronstadt. It made sense morally, socially and politically.
Brown has always had daddy issues
Economically, minimum wages may not make sense. But morally, socially, and politically they make every sense because it binds the community together to make sure parents can take care of their kids.
So the guy who has a small business whose expenses are going to go up 50%, and is eventually run out of business… he doesn’t have kids to take care of?
All business owners are sitting on gigantic fountains of profit which they greedily keep from their employees
OR
If you can’t pay a living wage, you don’t deserve to be in business.
(take your pick)
B) was picked for me by my own city council.
He didn’t build that. So what the government gives it can take away
If the guy can’t afford to pay a living wage, maybe he shouldn’t have had kids.
He’ll be fine because he can now get a job earning a living wage!
Rescuing him from the scourge of too many choices.
Small business owners are not a favored/protected class, so they and their kids do not count as humans in the eyes of the gov’t.
Politics don’t hold communities together.
Depends how you define “holding together”. For instance, the prison community is held together pretty well.
Here’s a random prog comment on why this is so good.
How much training do burger flippers undergo? I’ve worked plenty of retail jobs; if there’ s any training, it’s not more than a day or so.
they should do something to lower the cost of living in big cities as well as rural areas
… so do the exact of opposite of every left-wing urban policy enacted over the last 50+ years?
you only show how ignorant you are of what they are actually doing
… as opposed to being ignorant of how businesses function, which is not only acceptable but desirable.
Someone needs to point out to these assholes that living in a coastal metropolis is just as much a consumer good as anything else you spend money on. San Francisco too expensive on $8.50/hr? Move to Memphis; your money will go a lot farther there.
Don’t you know that Memphis is in the hell hole called the South! It must be filled with unenlightened hicks, KKK, and Rethuglicans!!! How dare you suggest I sell out my political ideology to be able to be self sufficient. Soon you will suggest that I should move to Texas.
They don’t have to move that far. The real solution to ultra-high housing costs in any major metropolitan area is to simply move out to the edges of that metropolitan area.
In Southern California, people have been moving further and further east to find affordable housing. These newer towns and cities are complete in that they have all the stores, shops, and infrastructure needed to live there without having to drive into the metro area. There are really only two reasons left to have to go to the metro area: entertainment and high-paying jobs (resulting in long commutes).
This.
Nobody (except the most moronic “progressive” statists) would be sympathetic to a minimum wage worker who had taken out a loan to buy a brand new Lexus and had to pay $1500 per month, so why is anyone sympathetic to a minimum wage worker who chooses to move to or remain in an expensive, glamorous city like San Francisco or New York City?
“they should do something to lower the cost of living in big cities as well as rural areas”
Massive public land auctions. There goes your equity.
Yeah, well, what about the stress?
As someone who’s worked across a large spectrum of job types, from the entry-level service sector jobs (busing tables, convenience store) to the full-on professional, salaried gigs, you don’t know real stress until Hospital Engineering fucks up a monthly test of the central failover circuit between street power and generator power, and your whole server room goes dark.
That place where i feel my anxiety physically just convulsed.
The poor guy on life support.
Agreed 110 percent.
The most frustrating thing was when I worked on a production line in a factory then got promoted to assistant supervisor, and everyone thought that I “don’t have to work anymore” because part of my job entails sitting at a desk typing on the computer.
Life is fucking easy when you just receive instructions from your boss, carry them out, and report any problems to them and receive instructions on how to proceed… Especially when your job is something like achieving the proper level of salt on French fries or making sure the ding-dongs and ho-hos are restocked on aisle 12.
Meh, you’d be surprised. In my pre-attorney days, I worked at Starbucks (which, btw, offered great benefits and paid above market, which is how they were able to get and keep higher quality employees). You’d be surprised how much training they require to make a latte. Seriously, it was like three full days.
Your boss has noticed.
*ducks*
^this
Yeah, I recall when I was a Wal-Mart stock associate they got me to do all the computer training. But once I was on the floor, the only training I got really was crushing cardboard, using the paint mixer and the price gun. Overall, none of those took long to learn.
There was a discussion awhile back about how Walmart was going to be giving their employees more training in places where the minimum wage had been raised. The person arguing that Walmart was likely doing this to “get more value” out of their employees had I presume never taken a Walmart CBT or anything like it.
Ze training, it does nothing…
I grew up in Bentonville, AR so most of the jobs available for teens were Wal-Mart or Wal-Mart-adjacent. The CBT was arduous, but only because there were 20 different modules designed to say “don’t sell tobacco to anyone who isn’t over 18!” that you had to wade through even if, like me at the time, you were 16 and couldn’t work the register with tobacco anyway. I just zoned out and then passed the quizzes because it’s pretty easy to answer: “A 12-year-old wants to buy beer, what should you do? A. Not sell it to them. B. Sell it to them. C. Share a drink with them in the store!”
And when I was on the floor (especially when I worked in photo) there was more time time spent not having anything to do than being busy. The stores near the home office are overstaffed relative to others, but we probably didn’t even deserve the near-minimum-wage salaries we were getting then, based on our output.
D. Make Pancakes
E. $2.99
F. Purlpe
The second someone in charge thinks the Pain-In-The-Arse factor of watching you is greater than the number of guest complaints you will generate.
How much training do burger flippers undergo? I’ve worked plenty of retail jobs; if there’ s any training, it’s not more than a day or so.
I would say they undergo a lot of training. How to operate this piece of fickle equipment, how to not get screwed by the occasional shifty vendor, how to effectively scrape curdled milk out of the bottom of a refrigerator cabinet, how to politely tell people cashing their paychecks at Walmart that they will have to wait for the CSM to get another till since it isn’t a fucking bank…
But the funny thing is that the more such training you have, the less likely you are to be spending your time working the bottom-rung jobs. In my experience, the people who “needed” their cashier job to pay a “living wage” were those who were least proficient at it.
In my experience, the people who “needed” their cashier job to pay a “living wage” were those who were least proficient at it.
^This. Spend a few months doing well at your minimum wage job (where “well” mostly involves showing up on time and doing your job half-way competently) and you won’t be making minimum wage very long.
And that’s the biggest shit on people here.
You started at $7.50- $8.50 like all min wage slaves… showed up every shift… worked hard and well enough in the first 18 months that your manager could rely on you so you’re now making $9.50/hr
Is WalMart now going to pay you $18.00- or are you making $15,50 to babysit the new crackhead off the street making $15.00?
“Life ain’t fair.”
That just means we need more laws!!
/prog
I started off flipping burgers for $3.35. Then I moved up to the bank, doing data entry of customer accounts on the computer for $4.82 ($10k/yr). Then I got a job in my field for $5.00. I’m still at that company, and actually still in the same job description, for $38.90.
You don’t have to stay at McDonald’s or Wal-Mart your entire life. Sometimes it is time to move on and move up.
I live in a reasonably large urban area (Minneapolis) and you need to look hard to find a job that isn’t paying $10 per hour. I worked as a cashier and was making more than that, and the store was having a hard time recruiting talent at that rate. There is a weird dynamic here where everyone in the state government has lived in the twin cities for so long that they have a hard time even understanding that the economy of large urban areas does not translate well to the vast extent of rural economy that is found in the rest of the state.
If there is going to be a minimum wage, it should be at the state and not federal level.
Even at the state level, it should be at the level of the lowest cost of living in the state. Then let more affluent counties or cities opt to be higher.
Who is this “they” who can dial the cost of living up and down, anyway?
how much time, training or stress those jobs entail
Most minimum wage jobs really have only two requirements. 1) Show up for your whole shift. 2) Follow instructions.
They’re really not that hard or stressful. That’s why most people only have such a job for a few months at a time. They either get a raise or a promotion for following the two requirements, or they get fired for not following them.
Right, the only thing people deserve is getting a fair price for the labor they are selling. My employer doesn’t give a shit about how much money I need, that’s my responsibility.
Dammit I thought Jerry Brown was a crypto-Libertarian?
Oh and….LIBERTARIAN MOMENT!
Jerry finally admits it is about feelings and has nothing to do with reality. You have to give the crazy bastard credit for honesty I guess.
Him signing the law and giving poor workers a raise is what is seen. The job loss, slow growth and business loss is lessobcvous and attributable to bad luck.
All the bad stuff is the work of the Wreckers. More bad stuff means there are more Wreckers doing bad stuff means the Government NEEDZ MOAR POWUR to fight the Wreckers.
They don’t blame bad luck for the job losses and economic woes, but greedy and evil corporations.
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Mario Cuomo, huh?
Too bad that they are phasing this in. I wish they just made it $15 an hour tomorrow. That would make the case study much easier and nobody except Californians would suffer.
The neighboring states would suffer, as even more California refugees who voted for this b.s. will invade them.
To be fair, they didn’t “vote for this”, they voted for Democrats. What were they going to do – vote for Republicans?!
What were they going to do – vote for Republicans?!
Well that’s just drastic. As we saw in the AM Links, voting Republican will DOOM THE PLANET.
They could have picked somebody other than this loser in the Democratic primaries. Also, California has a lively initiative process.
What do you call a California Republican? Answer: A new Texan
Texas would suffer from another wave of Left Coasters who want to make Texas like California.
They run to some place new, and then try to make that just like the shit hole they ran away from.
he understood that there may be some bad outcomes for such a massive, unprecedented mandate. And then he signed it into law anyway.
“Gotta take the good with the bad.”
And there you have the facts of life.
he understood that there may be some bad outcomes for such a massive, unprecedented mandate. And then he signed it into law anyway.
A perfect illustration of the Iron Law:
Foreseeable consequences are not unintended.
Ooh, I like that one!
At least someone is trying.
Logically, admitting that the economics of your economic bill don’t make sense doesn’t make sense. But “morally,” socially (signaling), and politically, they make sense because it binds our community together to make sure we can all afford the high ACA deductibles when we strain our arms from trying to pat ourselves on the back for helping people with someone else’s money.
New York Gov. Mario Cuomo also signed a $15 minimum wage law today
I though the totally dead could only vote for politicians. I didn’t realize they could also hold elective office.
(Note that I said totally dead, not just brain dead.)
And he’s going through other people’s pockets for loose change…
It’s great to mandate a $15 minimum wage for an entire state because of the feels. Unfortunately, everyone else in the state is going to effectively have less buying power. I imagine this is going to really screw over people with fixed incomes as their buying power goes down.
I am super interested to see the third and fourth order effects of this. I imagine prices are going to go up everywhere including grocery stores. I also imagine small business in central and Northern California are going to be straight up screwed.
“I am super interested to see the third and fourth order effects of this. I imagine prices are going to go up everywhere including grocery stores. I also imagine small business in central and Northern California are going to be straight up screwed.”
And you can bet that when this happens, the same “progressives” who pushed this crap through will pretend to be completely puzzled over why only giant corporations can operate businesses in that state and whine about how they have “killed off” smaller businesses.
Why are Democrats such underachievers? If $15 / hour allows people earning minimum wage to earn a decent living, wouldn’t $25 / hour allow them to live even better? But why stop at $25? If Dems really want to help out the working poor, why not swing for the fences and make the minimum wage $50 / hour? I think that would help them much more. /sarc off
California Uber Alles
Well, really, what point would he make?
Lots of crap the California legislature does doesn’t make sense.
No need to have standards just over this.
No, you guys just don’t understand. This is part of an overarching government plan to empty California of its excess population so that it doesn’t sink into Pacific Ocean!
More than that, the pressure of Californians who moved inland will induce continental flexing to actively LIFT the coasts, so we don’t need to worry about climate change drowning them.
You can thank your local Californian for their contribution to global prosperity at your earliest convenience.
to me, the first sentence is the important part. politically you can justify anything, but morally and socially, if it’s also not economically beneficial, then you’re just screwing your own voters with a smile and a pen because you can’t be bothered to tell them NO.
Oh lovely. Moral, social, and political. Three dimensions I wish government would realize they have no high ground on.
In one way, California is the ideal state to do minimum wage experiments in, as its borders with other states are all rural.
Here’s something to consider: suppose the minimum wage does reduce the number of available jobs (which is not proven). Well, the benefits to those who have jobs may OUTWEIGH the harm done by reducing the number of available jobs.
The minimum wage could reduce jobs but still have a net-beneficial overall effect.
Well yes, Toad, it is possible for something to produce net benefit for society at the expense of a minority. That’s why slavery was so popular for so long.
Toad, should free people in a free country be able to enter into an agreement for labor and wages that doesn’t government?
doesn’t involve government?
RE: “free people in a free country”: If a person cannot earn enough money to buy food, is he really free?
Yes.
Doesn’t this increase the cost of food? What about the folks who can’t get a job since it costs too much to hire them?
If a person must be forcibly deprived of his property to feed another, is he free?
And since when does anyone in this country starve for lack of means? Food banks throw away more food than they give away.
“If a person is not currently earning…” FTFY
When I was making $3.35 flipping burgers, I COULD make more, it just hadn’t happened yet
“Crony capitalism” means doing political favors FOR RICH PEOPLE, enabling them to become richer. Minimum-wage earners do not have enough money to buy political favors or to become cronies. Increasing the minimum wage is not crony capitalism.
And equating a minimum-wage increase with Nazi ovens is so silly it effectively removes you from serious debate. Precisely why Godwin’s law was invented.
Of course individual rights matter, but individuals do not have, and should not have, the rights you folks think they should have. You believe individuals are entitled to own unlimited amounts of money and property, but you are wrong. For instance, if one person were to acquire ownership of the entire world, should he be allowed to keep it for himself, or should he be required to share it with others?
Who supports raising the MW?
#3 will shock you!
Mr Toad –
You have some interesting ideas, but they are not intelligent. Nor, do I suspect, are you actually a toad.
“suppose the minimum wage does reduce the number of available jobs (which is not proven).”
Yes, it is proven. The price mechanism – reducing the amount of a product consumed when its price rises – has been proven for every single product ever produced. Why would this not apply to labor?
And drawing the parallel to slavery and the Nazi’s treatment of the jews is perfectly apt, as it totally refutes your theory that “”Crony capitalism” means doing political favors FOR RICH PEOPLE”. Clearly, if you can victimize a minority, then the minority is NOT the crony, but that doesn’t mean it isn’t crony capitalism.
And your theory that “individuals do not have, and should not have, the rights you folks think they should have” is….. obtuse, to say the least.
Why SHOULDN’T they have those rights and says who? YOU?
So you talk about crazy comparisons and then go on to suggest someone who owns the entire world. Money and property aren’t unlimited so what are you talking about?
What does this have to do with min wage?
Why not $100/hr?
Intelligent Mr. Toad,
I was trained as physicist/mathematician in school and later as a CPA in my professional career. I spent years in study of new Keynesian/neo-classical economics, which is where the “economic” justification for minimum wage is derived. I still love physics, but the farce of modern economics has become apparent to me through reasoned analysis and study. Please take up Mises, Hayek, and Rothbard. Their reasoned and logical analysis of economics shows that the intervention of forced minimum wages lowers overall utility. We libertarians come from all walks, poor and rich alike. I believe your heart is in the right place, but the tools you have chosen are flawed. Your example is hyperbole, and is less relevant than the Nazi/Jew example, which is actually spot on.
coloraDOOM is right–take a look at who supports the minimum wage. It’s not capitalists nor corporations, who stand to lose profits due to higher wages.
You would be correct if you used the term “cronyism” rather than “crony capitalism,” because as far as I know, labor unions are not capitalist in nature (their intellectual godfather was Marx, enemy of capitalism, so it is unlikely that unions would consider themselves capitalist).
Unions exist in capitalist structures. Laborers endeavor to elevate their bargaining position at market. Of course, they are easily replaced, in most cases, so they aren’t effective. The appeal to, and use of Force by, government emanates more from Fabian (mixed) socialism. Collectivist structures like communism and fascism ban unions from existence. They typically have a National Board to kangaroo issues through. Of course, all socialism ultimately leads to the same autocratic end, and our Fabian socialism has calcified into a “soft” corpora-fascism, which – as things stand now – is on the cusp of “maturing” into the hard line that is at the end of all types of socialism.
This seems akin to arguing for killing the disabled.
Or sterilizing them, if you’re squeamish – but bullets are cheaper than surgeons, so be sure to factor that in.
Criminal insanity!
RE: Gov. Brown Admits $15 Minimum Wage Does Not Make Economic Sense, Approves It Anyway
It all makes sense to Governor Brown.
It also makes sense to every idiot on planet Earth.
Why the hell would I care what makes sense “politically”?? Isn’t that another way of saying he’s preserving jobs for his progressive cronies? This guy is so out of touch. My niece, who was making more than minimum wage as a new CSUS graduate has now been relegated to the minimum-wage category. Thanks a lot, Jerry. That was really good for her ego. An another thing, NO ONE knows what “economic justice” is. That’s state capitol rotunda bullsh**. Now one in the real world speaks that way. By the way, I work for you:)
Cronyism, excessive regulations, a convoluted tax code, excessive government spending, an escalating national debt and the Federal Reserve are the major causes of the widening income inequality gap.
Solutions:
Abolish the tax code,16th Amendment and IRS.
Enact the Fair Tax.
Minimize regulations to only what is absolutely necessary.
Balance the budget.
Start decreasing the national debt.
Abolish the Federal Reserve, the FDIC and all bank regulations except one; require full disclosure on full or fractional reserve backing of deposits.
Treat gold, silver and cryptocurrencies as legal tender (not as an asset) for tax purposes.
The income inequality problem is counterintuitive. Big government equals more income inequality. Smaller government equals less income inequality.
The middle class is the byproduct of a free market economy; it is not manufactured by a politician’s tax gimmicks, minimum wage laws, or government redistribution of wealth.
There is no such thing as a living wage; there is only a wage that someone can afford to pay. You have to tailor your living around your wage, not have government tailor your wage around your living.
Any increase in the minimum wage would only be a temporary relief to some as jobs, other wages and prices rebalance around the increase. It will hurt unskilled workers looking for their first job.
It is about supply and demand. If you have an easy time filling your employee needs, you offer lower wages, if you have a hard time filling your employee needs, you offer higher wages; because if you do not your competition will and you will be out of business.
It is not about what people deserve or what is fair or what is just; it is about what the market will bear. Blame the consumer for shopping for the lowest price and blame the voter for voting for government to fix their problems.
If you feel workers should get better benefits and higher wages, then go start a business and offer these things to your workers. Lead by example and out compete those who pay less, instead of dictating to people who are actually providing jobs.
Everything is not an issue in need of a law or statute. Waving the magic government wand at businesses does not magically fix everything.
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$15/hr jobs will be few and far between.
Robotic automation will irresistible because no-one who must eat fast food will able able to afford it when the prices double.
Those who can’t automate their labor will simply be forced from the market place.
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