As I discussed in an earlier post, the Guvernator signed the bill raising the minimum wage to $8.00 per hour over the next year and a half. Yet another reason for the rest of the country to look at us in California and scratch their collective heads. Don’t get me wrong, it’s a good move for employees, particularly for those who need it most. The question I have is whether or not California will be able to maintain it’s share of the business world, let alone recruit new businesses into our state.
I suppose only time will tell.
I believe that there are other factors that can be used to recruit new businesses to California. Too often I have read job ads for positions such as web designers where they are being offered $8.00 per hour. In the Fort Lauderdale area, the wage for a web designer is in the range of $58,000 to $73,000. That comes down to $28 to $35 per hour.
When wants to set up shop in a particular location, they need to research what the wages are for that location, then budget accordingly to get the funds. It is ok to pay “slightly” below the market, such as $20 per hour instead of $28 per hour. However, arbitrarily picking numbers out of a hat will not get you quality employees.
A lot of the minimum wages workers are service workers and those businesses will not move away from California. Cost will simply be passed on to customers.
On top of my head, the only two fields I can think of where minimum wages are prevalent — unskilled manufacturing and farming — are already affected by downward pressure on employment. In the first case, manufacturing costs in China and emergent economies are much lower and in the second case, there is strong pressure from Mexico and works willing to do the job for minimum wages or quite possibly lower.