EDITORIAL: Despite business lobby gripes, minimum wage hike is smart

September 12, 2013 

There can be no debate about the nation's anemic economic recovery and its effect on the working poor. While the stock market soars, jobs and wages lag.

The national minimum wage remains at $7.25 per hour. It's $8 an hour in California, but has not increased in four years and trails nearby states. The minimum wage is $8.25 per hour in Nevada, $8.50 in Oregon and $8.67 in Washington.

Democratic leaders and the governor now have agreed to raise California's minimum wage to $10 over two years. It would increase to $9 on July 1, 2014, and to $10 on Jan. 1, 2016.

The California Chamber of Commerce is opposed. Calling AB 10 a "job killer," the chamber argues that businesses are struggling with tax increases imposed under Proposition 30, higher energy bills and rising medical costs driven by the Affordable Care Act. The chamber predicts the state will lose at least 48,000 jobs with a higher minimum wage.

But history doesn't support that pessimistic view. Past minimum wage hikes triggered small initial job losses, but the labor market adjusts and low-wage jobs rebound quickly. Moreover, extra money earned by low-wage workers is spent in their communities, mostly on rent, food and clothing. Experience shows that the additional wages become a boon to local economies.

Also, the notion that most minimum wage jobs at fast-food outlets or retail stores are filled by teenagers who live at home is outdated. According to the federal Bureau of Labor Statistics, the median age of fast-food workers nationally is 28; for women who make up more than two-thirds of that work force, it is 32.

On the other side of the equation, there is a public cost when wages slip below what families really need. Many minimum wage workers rely on food stamps to make ends meet. Their children qualify for subsidized school lunches and other government assistance. Some are homeless.

The bill has been the subject of intense debate over many months. In an economy with a record-high income gap (the top 10% of earners took more than half of the nation's total income last year), such an adjustment is long overdue. AB 10 is designed to increase the value of work, an American value that Democrats and Republicans should support.

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