Friday, November 1, 1996
ELECTIONS:
Historically, economical impact on businesses minimalBy John
Digrado
Daily Bruin Senior Staff
Possibly raising the state minimum wage level above and beyond
the current $4.75 per hour, California voters will be able to
decide next Tuesday to demand that all businesses pay some of their
lowest paid employees more, driving the state minimum wage to $5.00
per hour by March 1, 1997.
Proposition 210 proposes a second state minimum wage increase to
$5.75 per hour by March 1, 1998 Â a gross annual income
increase from $9,600 to $11,500 per year.
According to legislative analysts, about two million of
California’s roughly 13 million workers currently earn less than
$5.75 per hour. Fully 1.5 million of those affected by the increase
are over the age of 20, while the remainder consists of teenagers
working after-school jobs.
Not all lower-end wage earners will be directly affected by the
increase, though. For example, a student working at a job with the
students’ association (ASUCLA) earns a base salary of $6.16 per
hour  $1.41 above the current minimum wage.
Initiative supporters feel that those working hard to earn a
living deserve a minimum wage that will at least let them live
closer to the poverty line, saying that the minimum wage buys less
today than at any time within the past 40 years.
"California’s minimum wage is at a 40 year low," proponents of
the initiative comment in the California Voter Guide, noting that
both Oregon and Washington state currently have higher minimum wage
levels than California.
A minimum wage increase would help all aspects of the economy,
proponents said, adding that giving lower-end wage earners more
money to spend would aid all other aspects of the state’s economy
and recovery from the recession of the early 1990s.
But it is just those smaller businesses who have helped the
state pull out of its economic slump that would be hit the hardest
by the increase, initiative detractors said, since many small
businesses run on shoestring budgets. Any strain on those budgets
 even minimum wage increases  could drive thousands of
small businesses under.
If Proposition 210 passes, "I’ll be forced to pass on these wage
increases to my customers, many of whom are senior citizens," said
Connie Trimble, owner of Barron’s Family Restaurant in Burbank. "I
don’t know if my business can survive that."
Raising the minimum wage historically has had a minimal impact
on businesses, experts said, and does not trigger the massive
layoffs that many detractors claim will occur if the minimum wage
is increased.
"In any case, if we talk about a California minimum wage
increase overall, economists have shown that the increase would
have very modest effects on overall employment," said Wei-Yin Hu,
professor of economics at UCLA.
Proposition 210 isn’t the only legislation in consideration to
raise the minimum wage. Federal government legislators are
considering a minimum wage increase to $5.25 per hour on a national
level, and will bring the measure to a vote sometime during the
next legislative session.
Impacts of the initiative, if passed, are unclear as of yet
because of the federal legislation. Federal wage laws mandate that
state minimum wages must at least be equal, if not higher, than
federal levels.