Article courtesy of Forbes, Written by Tim Worstall
California has reached a deal which will raise the state minimum wage to $15 an hour over the next few years. It’s likely to be formally announced by Jerry Brown later today. Such a deal raises such hopes, doesn’t it? All those poorly paid workers in LA and San Francisco will be able to pay their way in life. And yet there’s always that nagging doubt that such price fixing might turn around and bite us on the fundament. And we actually do have proof of this. For we have a report about what a $15 minimum wage will do to employment in LA City. This is not, by the way, a report some from market fundamentalist like myself. This is from Michael Reich et al at Berkeley, stout supporters of a rise to $15. And yet even their report states that the net effect will be fewer jobs. And that’s after they play rather fast and loose with one of the major effects they are thinking of.
There’s also rather the problem that not all of California is all that rich: the towns of the Central Valley are going to have a much harder time of it. This simply isn’t going to work out well. READ MORE
Featured Image: Supporters of Oakland's minimum wage increase hold signs during a celebration rally outside of Oakland City Hall on February 27, 2015 in Oakland, California. Dozens of minimum wage workers gathered on the steps of Oakland City Hall to celebrate a $3 increase in the city's minimum wage to $12.25 an hour. Voters passed measure FF in November with 81 percent voting in favor of the wage increase. The new wage goes into effect on March 2. (Photo by Justin Sullivan/Getty Images)