Conservative political activist Ron Unz, best known for sponsoring a ballot initiative that limits bilingual education in California, is launching a new campaign. This time, Unz is pushing an intiative that would raise the state’s minimum wage to $10 an hour in 2015 and $12 in 2016. The reason, as summarized today in The New York Times:
Using what he sees as conservative principles to advocate a policy long championed by the left, Mr. Unz argues that significantly raising the minimum wage would help curb government spending on social services, strengthen the economy and make more jobs attractive to American-born workers.
“There are so many very low-wage workers, and we pay for huge social welfare programs for them,” he said in an interview. “This would save something on the order of tens of billions of dollars. Doesn’t it make more sense for employers to pay their workers than the government?”
Unz told KQED’s Scott Shafer in an interview Tuesday his measure, when fully implemented, “would put close to $15 billion a year extra into the pockets of California’s low-wage workers. And that’s an awful lot of money.”
California’s current minimum wage, $8 an hour, is scheduled to rise to $10 by 2016 under legislation signed in September by Gov. Jerry Brown. San Francisco and San Jose are among a long list of California cities that have set their own minimum wages or living wages for at least some workers. In San Francisco, the citywide minimum wage is $10.55 and will rise to $10.74 on Jan. 1. Under San Jose’s law, the minimum wage was set at $10 earlier this year and will rise to $10.15 after the 1st of the year.
The federal minimum wage is currently set at $7.25 an hour.
Virtually any time an increase in the minimum wage is proposed, business groups protest that requiring employers to pay workers more will cost jobs and hurt the economy. The California Chamber of Commerce declared that this year’s statewide minimum wage bill was a “job killer.” San Jose Mayor Chuck Reed campaigned against the 2012 ballot measure that raised the city’s minimum wage, arguing that it would cost jobs and force residents “to pay more for everything — groceries, gas, even a hamburger.”
Unz acknowledges there would be costs to raising the minimum wage, including higher prices for some goods and services. But in an essay last week, he said those costs would be more than balanced by the benefits of granting the lowest-paid workers a higher wage:
Leaving aside the obvious gains in financial and personal well-being for the lower strata of America’s working class, there would also be a large economic multiplier effect, boosting general business activity in our weak economy. America’s working poor tend to spend almost every dollar they earn, often even sinking into temporary debt on a monthly basis.[x] Raising the annual income of each such wage-earner couple by eight or ten thousand dollars would immediately send those same dollars flowing into the regular consumer economy, boosting sales and general economic activity. In effect, the proposal represents an enormous government stimulus package, but one targeting the working-poor and funded entirely by the private sector.
Talking to Scott Shafer, Unz expanded on how raising the minimum wage might affect the cost of taxpayer-supported services for low-paid workers:
What we have right now is a crazy system where employers pay their workers so low wages that the taxpayers wind up providing billions of dollars of social-welfare subsidies for those same workers — food stamps, housing, earned-income tax credit, all those sorts of things. Now, under a logical system of free-market capitalism, employers should pay their own workers instead of forcing the taxpayers to pay them instead. What we have is a system in which employers have privatized the benefits of their workers — they get all the labor — while they’ve socialized many of the costs, forcing the taxpayers to cover the living costs of their own workers, which is ridiculous.