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  • Does California’s Minimum Wage Make Economic Sense?

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    May 09, 2019
    By : Fox and Hounds Daily Thursday, May 9th, 2019

    David Kersten is an independent political consultant who lives in the Bay Area. Kersten is also an adjunct professor of public budgeting at the University of San Francisco.

    A new study on California’s minimum wage policies raises serious questions about whether the state’s minimum wage makes good economic sense.

    The April 2019 study, titled “The Minimum Wage: An Analysis of the Impact on the Restaurant Industry,” was prepared by the UC Riverside Center for Economic Forecasting and Development for the California Restaurant Association.  

    According to the study, California’s minimum wage is on path to increase annually to $15 per hour in 2022—50% higher in real terms than it was in 2012.  

    “This will, of course, benefit minimum-wage workers.  But a higher minimum wage could also create distortions in the labor market, potentially causing employers to cut employee hours, and for fewer job opportunities to arise for low-skilled and teenage workers.  Policy makers must consider these issues and ways to mitigate their effects, otherwise they risk causing more harm than good to the economy,” states the April 2019 report.

    The report examined 57 metropolitan regions across the United States, including but not limited to California.  It sought to account for changes in minimum wages made by many states to analyze how such changes have impacted employment trends in the industry, as well as earnings and the number of restaurant establishments operating in a given area.  Read More