The governor made a big show last week when he signed the bill raising the minimum wage to $10.
The show was just that—a feel-good show. It likely will reduce employment at entry level jobs instead of helping poor families as proponents argue. The reality is that most of the people holding minimum-wage jobs are teen-agers who are dipping their toes into the workforce for the first time.
There are some occasions where it is a relatively unskilled adult attempting to support a family—the issue there is not mandating what an employer has to pay—regardless of the job market—it’s providing the opportunity for that employee to improve themselves. Adding 20 percent plus the assorted government-mandated costs to an employer’s expenses makes it less likely they will hire additional employees.
Government, at all levels, assumes that its actions will benefit people without any real understanding of how people affected by the new laws or regulations will react. And people do react to protect their interests.
Columnist Thomas Sowell, a senior fellow at the Hoover Institution at Stanford University, took on the United States Dept. of Labor in his column published in the Bay Area News Group last Saturday. Sowell observed that the Labor Dept. was planning to extend minimum-wage coverage to domestic workers such as maids and other casual help in households. Of course, it is scheduled to take effect in 2015, after the mid-term elections in November 2014.
Sound familiar. Note when the full effects of ObamaCare—now—are kicking in—a full five years after the Democrats in Congress passed the legislation and the president signed it.
Sowell argues that the law is simply an overreach by a government agency eager to regulate and collect employment taxes on any potential “victim” (my word). The thought of a couple of senior citizens who need help around the house being regarded as employers is laughable.
It will lead, for those informed enough, to them calling in companies to perform duties that once were handled by individuals. Those will be part-time jobs—the only type of position most employers are hiring given the economic impacts of ObamaCare on employers.
Just as raising the minimum wage in California will lead to less opportunity for young people… the potential federal action that Sowell outlined so well will do the same for less-skilled people of all ages who could fill that niche. To say nothing of the effects on elderly folks without significant means who need some casual help.