Advocates for those seeking an increase in the minimum wage saw a huge victory last month as California, led by Governor Jerry Brown, passed an increase in the minimum wage to $15 an hour by 2022. The increase was successful for several reasons, not the least is the fact that California is a very expensive state to live in, especially the Bay area, Silicon Valley, and Los Angeles. It also enjoys a huge advantage in having the largest state population in the nation, which diminishes the risk that companies will threaten to pack up and move out of state to avoid paying increased labor costs.
Other areas such as the District are still struggling to get an opportunity to get such an increase in their minimum wage. One difference is that California’s state Government is controlled by the Democrats, while the District has its budget controlled by the Republican controlled United States Congress, which is against any increase in the minimum wage.
The wage increase will occur over six years starting with an increase to $10.50 in 2017. One thing that happened that could be implemented by other states and cities is that there is a provision that states that during the six years it takes to reach the $15 hour amount, the Governor can halt the increase temporarily if economic conditions warrant it or if the budget suffers a sizable deficit.
The reality is that this will give momentum to those seeking an increase but the opponents are going to fight even harder to stop increases from occurring. Technology is going to be an important thing to focus on because many businesses, particularly those in the restaurant sector, are seeing computerized gadgets start taking over functions that used to be done by workers, and that may pick up as businesses start seeing the impact of the wage increase.
There will be many people affected by the increase. The effects will not be known for at least two to three years but it would be fair to say that in California, there will be a substantial increase in people having to work multiple jobs (which can be beneficial to the worker if structured well). There will also unfortunately be a large number of people who will lose their jobs, either due to workforce reductions, or if businesses resort to using undocumented workers to avoid paying increased labor costs. Many businesses will also increase costs or add fees in addition to their normal pricing to offset the impact on profits.
California has a huge luxury in that the largest cities will not have to worry about a mass exodus of businesses leaving for other states (unlike Washington, D.C., where businesses could just head over the Potomac to Virginia or Maryland). Certain industries will be affected more than others. Fast food restaurants and restaurants in general are going to move towards more efficient use of workers, and that means that you probably will start seeing even more competition for jobs since there will be fewer positions available. You can also expect that employers will start screening prospective applicants more, which means education and experience will be even more important.
If you are currently struggling to make ends meet on a minimum wage, the time has come to start looking at how to increase your value to employers and that will be covered in an upcoming issue. Next issue will focus on transportation. This issue is extremely important, especially with the recent one day shutdown of the Metro, and the vast number of people in the District, who rely on public transportation daily.
