This marks the first in a regular series examining legislation introduced by California lawmakers.
At first glance, minimum wage laws are popular concepts. A recent Reason-Rupe poll found that 66% of Americans favor President Obama’s proposed 24% increase in the federal minimum wage to $9.00 per hour. This matches the sentiment found in a recent NBC/Wall Street Journal poll (58% in favor) and a Pew Research Center/USA Today poll (70% in favor). However, if educated about the effects of such policies, the public’s opinions shift; based on the Reason-Rupe poll (which asked a follow-up question stating one negative unintended consequence of minimum wage laws: employer layoffs), approval of a wage increase dropped to 37%.
In the “Spotlight” is AB 10, authored by Democratic Assemblyman Luis Alejo, which aims to increase California’s $8.00 per hour minimum wage. The bill has four stages:
1) Increase the minimum wage 3% on January 1, 2014 to $8.25;
2) Increase it by 6% on January 1, 2015 to $8.75;
3) Increase it again by 6% to $9.25 on January 1, 2016, and;
4) Starting on January 1, 2017 (and every January 1st thereafter), increase the minimum wage by the previous year’s California Consumer Price Index.
AB 10 would allow the California Industrial Welfare Commission to adjust the annual increase more than the California CPI, but would preclude it from decreasing (or increasing) the minimum wage in deflationary years.
Minimum wage laws all have the same intended goal: to reduce poverty. Proponents theorize that minimum wage increases will also boost employee morale thereby increasing business efficiency. However, despite their initial popularity, such policies continue to fall short.
Click to read more.