Minimum-Wage Overkill

Sensing a slam-dunk election-year issue, Assembly Democrats are proposing a hike in the minimum wage. They seem to have forgotten that the minimum wage has risen about 35% in the last 18 months, thanks to mandated increases by federal law and an initiative passed by California voters. And they show little understanding that another hoist in labor costs could especially hurt the fast-growing small and medium-size businesses that pepper California. The state minimum wage just went up on March 1.

Yet the Assembly Labor and Employment Committee foolishly voted Wednesday to approve bills that would raise the California minimum wage to $6.50 and $6.75 an hour, respectively, beginning next March. If either measure was approved by the Legislature, and in the wildly unlikely event that Gov. Pete Wilson signed the legislation, it would be the fifth minimum-wage increase since Oct. 1, 1996.

Few would argue that the current minimum wage of $5.75 an hour is enough to make an adequate living. Low-wage workers typically have to depend on multiple earners in their households, but many are part-timers or students.

The minimum wage in California can be changed by federal law, the Legislature or ballot initiative. The now-defunct state Industrial Welfare Commission, a five-member panel appointed by the governor, had the authority to approve state increases, which it frequently did in the 1970s and 1980s. But its last increase--to $4.25--was in 1988. Frustration at the lack of action for eight years under Republican governors in a down economy triggered the successful 1996 state initiative--Proposition 210--that boosted the minimum wage to $5.75 last month. (The Times opposed 210 because of its unprecedented move to establish pay scales by ballot initiative and because of a concurrent federal minimum-wage increase.) Proposition 210 followed action by Congress in August 1996 to raise the federal minimum wage to its current $5.15 an hour.

These increases have been phased in over a very short time, which has been a plus for workers. So far, employers seemed to have managed the pay hikes in a growing economy, but it’s been a jolt. Another increase now could very well make the state uncompetitive with neighboring states. State legislators now dangling another minimum-wage hike in front of the voters are using rather obvious political pandering, not sound economic reasoning.