Friday, November 1, 1996
ELECTIONS:
Historically, economical impact on businesses minimalBy John Digrado
Daily Bruin Senior Staff
Possibly raising the state minimum wage level above and beyond the current $4.75 per hour, California voters will be able to decide next Tuesday to demand that all businesses pay some of their lowest paid employees more, driving the state minimum wage to $5.00 per hour by March 1, 1997.
Proposition 210 proposes a second state minimum wage increase to $5.75 per hour by March 1, 1998 a gross annual income increase from $9,600 to $11,500 per year.
According to legislative analysts, about two million of California's roughly 13 million workers currently earn less than $5.75 per hour. Fully 1.5 million of those affected by the increase are over the age of 20, while the remainder consists of teenagers working after-school jobs.
Not all lower-end wage earners will be directly affected by the increase, though. For example, a student working at a job with the students' association (ASUCLA) earns a base salary of $6.16 per hour $1.41 above the current minimum wage.
Initiative supporters feel that those working hard to earn a living deserve a minimum wage that will at least let them live closer to the poverty line, saying that the minimum wage buys less today than at any time within the past 40 years.
"California's minimum wage is at a 40 year low," proponents of the initiative comment in the California Voter Guide, noting that both Oregon and Washington state currently have higher minimum wage levels than California.
A minimum wage increase would help all aspects of the economy, proponents said, adding that giving lower-end wage earners more money to spend would aid all other aspects of the state's economy and recovery from the recession of the early 1990s.
But it is just those smaller businesses who have helped the state pull out of its economic slump that would be hit the hardest by the increase, initiative detractors said, since many small businesses run on shoestring budgets. Any strain on those budgets even minimum wage increases could drive thousands of small businesses under.
If Proposition 210 passes, "I'll be forced to pass on these wage increases to my customers, many of whom are senior citizens," said Connie Trimble, owner of Barron's Family Restaurant in Burbank. "I don't know if my business can survive that."
Raising the minimum wage historically has had a minimal impact on businesses, experts said, and does not trigger the massive layoffs that many detractors claim will occur if the minimum wage is increased.
"In any case, if we talk about a California minimum wage increase overall, economists have shown that the increase would have very modest effects on overall employment," said Wei-Yin Hu, professor of economics at UCLA.
Proposition 210 isn't the only legislation in consideration to raise the minimum wage. Federal government legislators are considering a minimum wage increase to $5.25 per hour on a national level, and will bring the measure to a vote sometime during the next legislative session.
Impacts of the initiative, if passed, are unclear as of yet because of the federal legislation. Federal wage laws mandate that state minimum wages must at least be equal, if not higher, than federal levels.