2013 September 13 Friday
California Minimum Wage To Hit $10 Per Hour

The California state legislature made a bold move to cut demand for low skilled workers. But they did not go far enough. How about $12 per hour? Or even $14 per hour? Better yet, $15 per hour. Sure, the unemployment rate will rise. But a huge acceleration of automation will raise living standards of the middle and upper classes in the medium term and beyond.

An unemployable lower class is inevitable anyway. Better it happens sooner than later. We already face a rising demographic segment that wants a bigger welfare state (table 4.2). If we cut demand for their labor that segment won't grow as much.

A higher minimum wage will reduce demand for low skilled immigrants and their children and grandchildren. How many legislators were motivated by a deluded view of the labor market? How many were just cynically buying votes? Once we account for those two categories of bad motivations for their votes how many politicians remain who voted for a constructive reason: to cut low skilled immigration?

The benefits of a much higher minimum wage on immigration are so great (outweighing assorted obvious costs) I am hopeful that more state legislatures will take up the battle.

Share |      By Randall Parker at 2013 September 13 07:40 PM 

daveg said at September 14, 2013 10:29 AM:

I agree with this. Sometimes you have to think outside the box.

radical blogger said at September 15, 2013 5:08 PM:

you seem to have become persona non grata with the paleocon crowd now that you have embraced populist, worker-oriented economics. That says a lot about the paleocon crowd--they are inherently rightwingers that are programmed by their subculture to use the immigration and white rights issues to attract support to the GOP.

WJ said at October 1, 2013 7:32 PM:

Note that California conveniently post-dates the increase to after theirs and Gov. Brown's next re-election. The economic consequences won't hit until then. This is the latest and greatest improvement in "Government of the People, By the People, For the People": leaving the impact to hit on someone else's watch, or else this:

In 2007 or 2008, the Utah state legislature passed a bill *mildly* increasing immigration enforcement, including E-Verify requirements. The governor, Jonny Huntsman, Jr., signed the bill but unlike most bills, which go into effect just months after passage, this bill was postdated until after the 2008 election. Huntsman got re-elected...then proposed delaying the enforcement even further, or outright revoking it.

California, given its cost-of-living, should be raising the minimum wage to $12/hour. It should be phased in immediately. If the Leftists running the state were at all serious, that's what they'd do.

WJ said at October 1, 2013 7:37 PM:

Randall, I want to congratulate you for understanding what so few brainwashed conservatives manage to grasp: that absent a reasonable immigration policy, higher minimum wages are our best friend. Reducing the growth in the need for unskilled labor reduces the demand for immigrants, legal and illegal. If we can't stop illegal immigration and reduce legal immigration back to a reasonable level (to less than a third of what it is today) the next best option is to jack up the minimum wage so that stop creating businesses built on the assumption of dirt cheap labor they can only get from elsewhere.

Randall Parker said at October 1, 2013 9:39 PM:

radical blogger,

One of the biggest creeping realizations of my life is that we don't really have leading figures really sticking up for us. When I was a kid the message that I got was that the US government and the US people and business leaders had far more common shared interests and that our leaders really had our best interests at heart. I've so lost all that faith. Death by a thousand cuts. I used to think the other side was bad but at least our side was good. Now my take is so much worse.


Thanks. It seems so obvious.

Even without a higher minimum wage something else is afoot: automation is working to reduce the demand for immigrant labor. Moderately smart people are increasingly needing to move down market to compete with the least skilled for the lower paying jobs that are left. So I think the people falling out of the middle class are going to knock high school drop-out immigrants out of much of the labor market. Granted, our middle class is suffering. But at least there is a benefit to that.

What could really undermine the demand for immigrant labor: online education. If college profs get laid off some of them have to drive dump trucks and taxis, put on roofs, and pick vegetables. That would be great.

WJ said at October 1, 2013 10:32 PM:

* "Thanks. It seems so obvious." *

Precisely. It's one of the few ways of reducing immigration that Democrats would support. They have to support it, or else betray their base. And Republicans should support it, both because it would reduce legal and illegal immigration *and* because it would show concern for the working class.

Hopefully next year the shrewder of the two parties will propose this right before an election. I'd like that to be the Republicans, though I fear it will have to be the Democrats.

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