Lawmakers pushing to tie California minimum wage to consumer price index

Sacramento Bee ^ | 4/24/12 | Jim Sanders

[SmithL]

Gasoline was selling for $3.33 a gallon, Jerry Brown was attorney general, and California was bracing for a budget crisis when the state's hourly minimum wage rose to $8 in early 2008.

Fast forward to now, and much has changed: Gas is almost a dollar higher, Brown is governor, and the state is reeling from years of red ink. But the minimum wage hasn't budged a cent.

New legislation would change that, ensuring future increases for the state's lowest-wage workers while letting lawmakers evade political heat by taking the hot-button issue out of their hands.

Assembly Bill 1439 by Assemblyman Luis Alejo would prohibit the minimum wage from being lowered as consumer prices fall but would mandate increases as prices rise. The indexing would be expected to hike the minimum wage about 14 cents next January, but more importantly, it would set the stage for what could be annual hikes in years to come.

[SmithL]

[ZirconEncrustedTweezers]

Wait for it, here it comes. Crushing inflation in 3... 2... 1...

[fhayek]

Is it really that hard a concept to realize that if you have to pay your employees more, business may have to charge more for their goods and services to keep from going bankrupt?

[SECURE AMERICA]

Can’t imagine the havoc this will cause with business hiring and annual evaluations and yearly raises etc.......

[battlecry]

Positive feedback is lost on these fools. No wonder they sell such “high-end” audio nonsense over there.

[Nip]

California legislators, like legislators everywhere, don't realize there is a direct linkage between raising the minimum wage and higher costs.

Unless there are price freezes raising the minimum wage only results in higher prices.

Why?

Most businessmen will quickly tell you that an employee needs to ear roughly twice he is paid for the business to stay afloat. Many businesses with fixed costs and low prices send their employees home whenever business activity drops. The reason is there isn't enough money wanking in the door to pay salaries.

Raise the minimum wage and prices must go up or businesses go broke.

Plus, everyone who spends money on anything has a maximum value they will pay for everything. When the Clinton's were pushing HilaryCare a pizza shop owner approached them complaining about the costs of HilaryCare and how it would drive the costs he had to charge per pizza up. Hilary's response was basically so what, raise your prices. The owner's response was people would stop buying his pizzas resulted in the infamous deer in the headlights look from Hilary - she had no clue to that obvious linkage.

[BlueLancer]

"The reason is there isn't enough money wanking in the door to pay salaries.

Now there's something you don't see every day ...

[count-your-change]

A minimum wage of $30.00/hr. would allow all the citizens of Cal. to live in dignity and the comfort of TWO big screen t.v.’s.

[rstrahan]

And the outward migration of businesses fron CA continues

[Oldeconomybuyer]

Why not make it $50 per hour? $80 per hour? Why not equal to 100% of the gross revenue of their employer?

[ridesthemiles]

Note to California Business Owners:

How much STATE income tax did your business pay in California in 2011? 2010? 2009?

How much personal Income Tax did YOU pay to the state of California in 2011? 2010? 2009?

The state of Nevada has no income tax for either.

Here, that money becomes money IN YOUR POCKET.

What kinds of rates did you pay for your property taxes??

My property taxes in 2011 on 5.58 acres were about $1200.

My property is turn-key for horses, fenced,cross-fenced, garage, house less than 8 years old. Garage, big driveway & other horse items. It is for sale—due to another family member who has health problems. Turn key for horses in 12 different places.

There are many available properties here in N Nevada for both commercial and residential usage.

Make a trip to Reno—Carson City—Gardnerville for 5 days. Drive around. See what you and your business could do here instead of dealing with the California loonies.

4 seasons—but not a horrid winter. Lake Tahoe & Heavenly Valley for boating & skiing less than 75 minutes away. Good food, entertainment & ALWAYS something happening each weekend at Virginia City.

New commercial area called Tahoe-Reno Industrial Park just east of Reno off I-80, with it’s own on/off ramps & power system. Lance Gilman is the owner. Variety of businesses already there.

Clean air—blue skies—stars at night.

When is the last time you saw that in California???

Think about it.

[nascarnation]

Great post.

Just like here in Indiana we’re seeing an influx of businesses escaping the liberal hellhole called Illinois.

[Wyatt's Torch]

“inflation is always, and everywhere, a monetary phenomenon.” ~ Milton Friedman

Rising (minimum) wage does not cause inflation. It is a symptom of inflation.

[lowbridge]

But Nevada keeps on voting for Reid in the senate. What’s up with that?

[count-your-change]

The comparison to Greece is not far off. O.K. to visit but no one wants to live there. But unlike Greece Cal. has enormous resources it could tap. Makes a person shake their head.