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Economy

Assembly Bills 10 and 400: Would Raising Minimum Wage, Adding Paid Sick Days Hurt the California Economy?

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Thu, May 26, 2011 at 4:40 PM
click to enlarge Would you take this job for an extra 50 cents? - LIBCOM.ORG
  • libcom.org
  • Would you take this job for an extra 50 cents?

While the State Assembly committee readies itself to vote tomorrow on San Francisco Assembywoman Fiona Ma's proposals to 1) increase minimum wage from $8 to $8.50 and 2) allow for nine paid sick days per year in the California workplace, a battle of the studies rages on between businessfolk who think the bills will tank the economy and workers' advocates who insist they won't.

The National Employment Law Project presented UC Berkeley-hashed numbers in April that showed upping minimum wage did not lead to layoffs and unemployment. But the Employment Policies Institute says those numbers are bogus -- the result of a man-made equation that uses so many controls it stops mimicking reality.

The first study argues:

"Boosting the earnings of low-paid workers reduces turnover and absenteeism while increasing morale and productivity, creating efficiencies for employers that offset a substantial portion of the higher wage costs."

Sounds kinda overoptimistic, if you ask us. The California Chamber of Commerce agrees, calling the minimum-wage boost a bona fied "job killer." (Along with a proposed bill that would protect stoned employees with medical excuses, and one that would mandate days off for being depressed. Uh -- yes please.)

Voting for higher wages and more sick days would be the Assembly's easy, feel-good option. But if what the Chamber says is true, we must ask: At what point should workers' rights be compromised in the name of overcoming the deficit?

It's a little like the furloughs-versus-layoffs question. Should we protect the well-being of the few or maintain a bare minimum for the many?

For the Employment Policies Institute, there's no question that the economy as a whole should come first. From their presser:

"Many impacted employers have low profit margins, so for each dollar in revenue, only a few cents are made in profit--meaning there's not a lot of leeway for added labor costs," said Saltsman. "This is especially true among employees already earning the minimum, and could cause job loss among this vulnerable group."

We've contacted Assemblywoman Ma for comment. But what do you think: are AB 400 and AB 10 really just "job killers" disguised as gifts to the working class?

[@simone_electra/swilson@laweekly.com]

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