MOORLACH UPDATE — $15 Minimum Wage — March 29, 2016

It’s not too often that a story grabs so much attention. But, then again, it’s not too often that a state Governor steps up to the microphone and declares that he is going to increase your labor costs by 50 percent!

Last week Governor Brown opposed an increase to the minimum wage. Why? Because In Home Support Services (IHSS), an agency recently assumed by the State of California, pays its employees the minimum wage. The Governor knew how expensive this would be in future budgets. Not to mention the current growing defined benefit pension plan contribution increases and the need to fix roads. You can read what the Governor said about this expensive mandate on page 11 of the proposed Budget Summary (emphasis mine).

However, higher minimum wage laws are not free. They raise the operating costs of many businesses, and the state must shoulder higher wages in its programs, particularly In‑Home Supportive Services and developmental services. For example, the increase to $10 an hour has raised General Fund costs by over $250 million annually. Already, there are proposals to raise the minimum wage further. At $15 an hour, as two ballot measures propose, the General Fund would face major increased costs, estimated at more than $4 billion annually by 2021.

Yesterday he stated it was a matter of economic justice to increase the minimum wage in California. What happened? In the last few days, labor and public employee unions were successful in gathering enough signatures to put a minimum wage increase measure on the November ballot.

The Governor believes that the polling shows that this proposition would prevail. So, he decided to do something a little less draconian (very little less) and work with his natural base. After all, it’s the Democrats and the labor and public employee unions that run this state. And, it is the Democrats and the labor and public employee unions that will take this state to its financial knees. And it won’t take very much more to make this happen.

Governor Brown will not be in office when the full impact is felt. But, in this one move, our frugal Governor is tossing out much of his hard work in holding the state’s budget together. And, the effect could devastate the state’s economy, too. One caller last night on the Pat Walsh Show on KFPK 1530 AM mentioned that he was a retiree on a fixed income and his Social Security has not risen in the last five years. How can he afford the cost increases that will occur with the increase of the minimum wage?

Naturally, I was opposed to this idea (see MOORLACH UPDATE — SB 3 — June 2, 2015 june 2, 2015 john moorlach). Government is not supposed to tell a free market how to conduct itself. When it does, it does so at its own peril. Consequently, I enjoyed television and radio interviews during the afternoon and evening.

There is a fun collection of clippings. The first three are provided in full, with the remainder just providing the highlights.

ABC Channel 10 (http://www.abc10.com/news/local/gov-jerry-brown-announces-minimum-wage-deal/107634103) provided for a stimulating interview. They used a portion of the debate in the first piece below.

The new owners of the OC Register, which includes the Contra Costa Times, The San Jose Mercury News and the Daily Democrat, provides the second piece below. And MyNewsLA provides the third full piece below.

For the brief quote listing, here they are in sequential order:

You Don’t Know Football
Quadrangle Online
Bilbaoya.com
Junior College
Senegal ACTU
La Hablylie.com
Pop Herald
Ecommerce-Journal
Hoy

http://www.abc10.com/news/local/gov-jerry-brown-announces-minimum-wage-deal/107634103

Gov. Brown announces minimum wage deal

Gov. Jerry Brown officially announced a push to increase California’s minimum wage to $15 an hour.

The deal is a compromise with labor unions to increase the minimum wage at a slower pace than they had originally intended.

“It’s a matter of economic justice,” Brown said. “It makes sense and will help our entire state do much better.”

In the past, Brown warned against such a steep increase. On Tuesday, he said it’s only fair for workers like Holly Diaz to earn more.

“I love my job,” Diaz, a fast food restaurant worker, said, “but I love my family more, and I should not have to struggle daily to support them.”

The business community says one size doesn’t fit all, and that a $15 per hour minimum wage may make sense in expensive cities like San Francisco, but not in Sacramento.

“You’re going to see higher increases for cost of goods,” Peter Tateishi, President and CEO of the Sacramento Metro Chamber of Commerce, said. “You’re going to see probably a loss of jobs and most likely a reduction in hours for those making minimum wage.”

State Sen. John Moorlach, R-Costa Mesa, plans to vote against the bill that he says will push businesses out of the state.

“(The owners) are just rolling up shop and saying ‘it’s easier to do business in Texas or Utah or Nevada and that hurts our people even more in the long run,’" Moorlach said.

The bill includes flexibility to stop wage increases if the economy slows down or unemployment goes up.

California’s $15 minimum wage: Brown defends sudden embrace of wage hike

By Matthew Artz, martz

Gov. Jerry Brown defended his sudden embrace of a $15 minimum wage Monday, calling the trailblazing bill he hammered out with Democratic leaders "a matter of economic justice" and warning business groups that trying to derail the legislation would amount to "cutting their own throat."

Brown’s newfound support to gradually boost the state’s already highest-in-the-nation hourly minimum wage from $10 to $15 comes less than a year after he resisted a more modest hike. In his 2016 budget plan, the notoriously frugal governor warned that a $15 minimum wage would cost the state about $4 billion a year and risk plunging it back into the red.

But with polls showing strong public support for two even more ambitious labor-backed ballot minimum wage initiatives, Brown broke with business leaders and cut a deal to make California the first state to commit to a $15 hourly wage floor — by 2022. The proposal is forecast to benefit 5.6 million workers, accounting for 32 percent of statewide workforce.

"This is a bold proposal. Make no mistake about it," Brown said during a news conference at the state Capitol, flanked by labor leaders and top Democratic lawmakers, who are expected to begin debating the bill this week and could vote as early as Thursday.

But he said it included several safeguards if the economy faltered, and, in taking a page out of Bernie Sanders’ stump speech, made the case that the working poor needed a big raise.

"Remember, you’ve got to listen to the workers," he said. "It is quite incredible that there is so much power, so much wealth, yet so many people are struggling on $10 an hour."

With California now leading the way, several more states, including New York, are expected to hop on the $15 hourly minimum wage bandwagon, which labor unions have been driving for several years to remedy growing income inequality. The federal minimum wage is $7.25 an hour.

"This is historic in its scale and it will absolutely have a ripple effect nationally," said Paul Sonn, who directs the New York-based National Employment Law Project. "It will cement $15 as the national benchmark for where we need wages to go at the bottom of the economy."

The proposal would also head off a potentially costly ballot fight with labor groups who said they would withdraw their measures — which proposed reaching a $15 minimum wage sooner, in either 2020 or 2021 — once the compromise measure becomes law.

In addition to establishing a $15 dollar minimum wage by 2022, the legislation would tie future increases to inflation, just as the unions had proposed. However, the compromise plan would give the governor leeway to delay scheduled minimum wage increases for one year in the event of an economic downturn or budget shortfall. It also would give businesses with fewer than 26 workers an extra year to comply.

That was hardly enough for business groups and Republican lawmakers who attacked the plan and criticized the governor for not driving a harder bargain. "Caving in on the minimum wage is hardly an act of political courage," said Michael Saltsman, a research director for the business-backed Economic Policy Institute.

State Sen. John Moorlach, R-Costa Mesa, referred to the bill as a "roadblock" for business. "We have no way of knowing if this minimum wage hike will help or hurt workers and job growth, which California families need," he said.

That California is likely to become the first state to back labor’s "Fight for $15" should be no surprise given the stark income disparities in many of its biggest cities, said Thad Kousser, a professor of politics at UC San Diego.

"You have people looking out the window of the Google bus at the grinding poverty of the Tenderloin," he said. "That can make you more sympathetic than if you were living in a suburban gated community."

Recent polls show California at the vanguard of a movement to address income inequality, which has become the leading issue in this year’s Democratic presidential primary fight. Both Sanders and Hillary Clinton on Monday declared in tweets their support for California’s proposal, with Sanders distinguishing himself as the candidate calling for a national $15 minimum wage.

A Field Poll last year found 68 percent of California voters supported a $15 hourly minimum wage. And a recent poll by the Public Policy Institute of California found strong support for extending Proposition 30, which increased income taxes on people making more than $250,000 a year.

Democratic leaders cited polling data in calling for business groups to accept the governor’s $15 minimum wage proposal, warning that if it failed, one of the union-backed plans would become law.

Already, San Francisco, Los Angeles, Emeryville, El Cerrito and Santa Monica have passed laws phasing in the $15 wage floor.

Kousser said the unions’ minimum wage drive has gained traction because it is politically palatable to many voters, even those who don’t want to tax the rich.

"It’s not big government. And it’s not handouts," he said. "The people who get rewarded are doing jobs that are not easy."

Dave Regan, president of SEIU-United Healthcare Workers West, which had spearheaded one of the ballot measures, said the compromise showed that union members could "set the terms of the debate." He also said it would allow the unions to spend money on the presidential race and another measure it’s spearheading to address income disparities: a cap on executive compensation for hospital executives. "We’ll be able to focus on that now," he said.

Staff Writer Jessica Calefati contributed to this report. Contact Matthew Artz at 510-208-6435.

Hooray for $15 state minimum wage: Dems, unions love it, GOP not so much

POSTED BY HILLARY JACKSON

Labor activists, state lawmakers and local leaders, including Los Angeles Mayor Eric Garcetti, Monday hailed a deal struck with Gov. Jerry Brown and state legislative and labor leaders to raise California’s minimum wage to $15 per hour by 2022.

Senate President pro Tem Kevin de Leon, D-Los Angeles, said he is “pleased that we have a deal in place that will raise living standards for millions of Californians, while also spurring new demand for goods and services and helping businesses thrive.”

The wage hike would affect 5.6 million workers, or about a third of the statewide workforce, de Leon said.

Assembly Speaker Anthony Rendon, D-Paramount, says he sees “a lot of good in the deal.”

“If we can come together behind this compromise, it will address the need to move to a $15 minimum wage while eliminating the chance that costly or competing campaigns could mean that no increase initiative passes,” he said.

The state deal to raise the minimum wage follows the lead of Los Angeles, and continues to put the pressure on national leaders to approve a hike to the federal minimum wage, according to Mayor Eric Garcetti.

“While Washington watches, cities and states act,” he said. “Gov. Brown, Speaker (Anthony) Rendon, President pro Tem de Leon and labor leaders across our state took decisive action to give more Californians a chance to join the middle class. City by city, state by state, we can confront the scourge of income inequality and make a difference in the lives of millions of families.”

Los Angeles city’s minimum wage is set to go up six months sooner than the state’s first planned increase — to $10.50 on July 1 and eventually reaching $15 per hour in 2020, with future increases pegged to the Consumer Price Index.

The same wage hike schedule was also adopted for the unincorporated areas of Los Angeles County.

Other California cities have also enacted wage increases, some even earlier than Los Angeles. San Jose’s wage rose to $10.30 per hour in Jan. 1, 2015, and is set to continue climbing depending on the CPI.

San Francisco’s minimum hourly wage, now at $12.25, will go up to $13 on July 1 and to $15 in 2018, followed by further increases based on CPI, under a measure approved by that city’s voters in 2014.

Brown said the compromise deal, which his administration reached over the weekend with key labor and legislative leaders, “raises the minimum wage in a careful and responsible way and provides some flexibility if economic and budgetary conditions change.”

The first hike — to $10.50 — is set to go into effect in January 2017, rising to $11 on Jan. 1, 2018. The minimum wage would then go up by a dollar in each of the following years until it reaches $15 in 2022, after which it would continue to rise each year by up to 3.5 percent to account for inflation.

Businesses with 25 or fewer employees get an extra year to raise their wage, so that workers will be paid $15 by 2023.

The plan also gives the governor the ability to temporarily halt the raises if there is a forecasted budget deficit of more than one percent of annual revenue, or due to poor economic conditions such as declines in jobs and retail sales.

Government workers who provide in-home health services will receive an additional three paid sick days under the plan.

The deal comes after two separate ballot initiatives were started by labor unions to raise the statewide minimum wage from $10 to $15 per hour. Labor officials behind one of the campaigns said they plan to withdraw their proposed measure once the state is signed into law.

Laphonza Butler, president of Service Employees International Union California, said the deal was the result of efforts by fast-food workers, home care providers, early childhood educators and other workers who “made history and delivered hope to millions of families struggling to get by on wages too low to live and without benefits such as sick days.”

“SEIU California’s 700,000 workers are proud to have fought alongside the ‘Fight for $15′ to show the world that when workers stand together, we can improve the lives of our families and create a fairer economy,” Butler said. “California elected leaders have demonstrated the leadership the nation is looking for.”

The proponents behind the other proposed ballot measure, SEIU-United Healthcare Workers West, are still weighing whether to withdraw their minimum wage initiative.

“We all know it’s a long way from a proposal to a final measure that becomes law, so we don’t intend to take an action on our initiative until it is finalized,” SEIU-UHW Executive Board member Ruby Olivas said.

“There are a lot of details to understand, particularly around the ‘pause button’ provisions,” she said. “We made a sober and deliberate decision last April to file our initiative, and once all the details are known about the new law, we will make a sober and deliberate decision on whether to withdraw it.”

Rusty Hicks, the head of the Los Angeles County Federation of Labor, called the deal “a great victory for California, coming off the heels of our victories in Southern California.”

He added that the “agreement also shows that the great strength of our labor movement is felt in every corner of our state.”

But Sen. John Moorlach, R-Costa Mesa, voiced his opposition to the wage deal, saying the state’s “high poverty rate” is due to the difficulty of operating a business in California.

“Instead of adding more road blocks for businesses, we must, first, develop an overall plan for economic competitiveness that will rebuild our economy,” he said. “But, absent that blueprint, we have no way of knowing if this minimum wage hike will help or hurt workers and the job growth which California families need.”

The statewide minimum wage rose to $10 per hour in Jan. 1 and no additional increases had been planned prior to the announcement of the deal.

Wire reports

Gov. Brown announces minimum wage deal

by Shawn Conner |

But Sen. John Moorlach, R-Costa Mesa, voiced his opposition to the wage deal, saying the state’s "high poverty rate" is due to the difficulty of operating a business in California. 2022 is the target, we know it’s coming, we can plan for that. Mark Leno’s bill to raise the minimum wage to $13 an hour by 2017.

Republicans and business groups have quickly criticized the deal.

But Sen. John Moorlach, R-Costa Mesa, voiced his opposition to the wage deal, saying the state’s "high poverty rate" is due to the difficulty of operating a business in California.

California to raise minimum wage to $15/hr over 6 yrs.

Otis Underwood

But Sen. John Moorlach, R-Costa Mesa, voiced his opposition to the wage deal, saying the state’s "high poverty rate" is due to the difficulty of operating a business in California.

California deal could make state first with $15 minimum wage

"(The owners) are just rolling up shop and saying ‘it’s easier to do business in Texas or Utah or Nevada and that hurts our people even more in the long run, ‘" Moorlach said.

Junior College

Junior College

California reaches deal to be first state with US$15/hour minimum wage

AUTHOR ADAM CARTER

State Sen. John Moorlach, R-Costa Mesa, referred to the bill as a “roadblock” for business. Major players in the fast food industry, including McDonald’s, Hardees, Carl’s Jr., and Domino’s Pizza, are taking steps in this direction, proving once more that the push for minimum wage hikes are achieving numerous unintended negative consequences.


Economists eye California minimum wage proposal

Mercedes Poole

State Sen. John Moorlach, R-Costa Mesa, referred to the bill as a "roadblock" for business.

LUCENA INFORMACION

California’s $15/hour wage could help workers, cost jobs

Mariano Disla

State Sen. John Moorlach, R-Costa Mesa, referred to the bill as a "roadblock" for business.

Labor pans California minimum wage proposal

Auteur: Phil Beauvilliers

State Sen. John Moorlach, R-Costa Mesa, referred to the bill as a "roadblock" for business.

Minimum Wage Increase Could Hurt Local Businesses
Vicki Perkins

But Sen. John Moorlach, R-Costa Mesa, voiced his opposition to
the wage deal, saying the state’s "high poverty rate" is due to the
difficulty of operating a business in California. "This pain from a
$15 minimum wage will only be exacerbated in more troubled
counties in the state".

Why California’s $15 minimum

wage deal matters

Melissa Porter

But Sen. John Moorlach, R-Costa Mesa, voiced his opposition to the
wage deal, saying the state’s "high poverty rate" is due to the difficulty of
operating a business in California.


Aumento salarial
recrudecerá la pobreza,
dicen políticos

Selene Rivera Contact Reporter

Sin embargo, no todos los legisladores están de acuerdo con

el compromiso. El senador John Moorlach dijo estar

en oposición al aumento y culpó a la pobreza de lo difícil

que resulta operar un negocio en California.

“En lugar de agregar más obstáculos para los negocios,

deberíamos primero desarrollar un plan para que haya

más competitividad económica que podría reconstruir la

economía”, dijo Moorlach.

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