Californians have supported efforts to raise the minimum wage in the past, but this time they didn’t budge.
After two weeks of post-election uncertainty, Proposition 32, a proposal to raise the state’s minimum wage to $18 an hour, narrowly failed.
The rejection “was a painful sign of the times for states like California,” said John Kabatek, state director of the National Federation of Independent Business, which had urged voters to vote no. “It certainly sends a message that Californians across the political spectrum are tired of rising costs and increased uncertainty on Main Street.”
Proposition 32 narrowly fell short and was declared a failure, with 49.2% voting “yes.” The Associated Press called the race Tuesday night.
The results were the latest sign of a rightward shift in the reliably blue state, which saw many surprise results in the Nov. 5 election. Voters overwhelmingly supported a bill that would have overturned a decade of progressive criminal justice reform and rejected a bill that would have banned forced labor.
Opponents and economists said withdrawing the proposed minimum wage hike showed voters were wary of companies raising prices to offset higher labor costs. After years of high inflation, the prospect of paying more for consumer goods wasn’t particularly appealing. This has created a deep-rooted feeling among many people that their financial foundations are unstable.
“Minimum wage debates are always very emotional,” says Till von Wachter, an economics professor at the University of California, Los Angeles. “Right now, economic issues are the main concern, which could lead to a refusal to increase the minimum wage.”
The proposal, which would raise the minimum wage to $17 an hour for large employers immediately and to $18 an hour starting in January, divided voters sharply. Small employers with 25 or fewer employees would be subject to similar obligations, but the tax rate would be slower, to $17 an hour next year and $18 an hour in 2026.
The initiative received support in counties including Los Angeles, Santa Barbara, and all nine counties that make up the San Francisco Bay Area. Orange and San Diego counties voted no, while high-income counties were more likely to vote yes, according to a Times review of the voting results.
California already has one of the highest minimum wages in the country, trailing only the District of Columbia and Washington state. The state’s minimum wage has doubled since 2010, most recently increasing to $16 from $15.50 in January.
Many cities, including Los Angeles, West Hollywood, Santa Monica, and Pasadena, have higher minimums. Meanwhile, the federal minimum wage has remained at $7.25 for 15 years.
As a result, voters may have felt that further wage increases were unnecessary, said Chris Thornburgh, an economist who founded Beacon Economics, a research and consulting firm in Los Angeles. He said the results partly reflected the country’s overall rightward shift, but also reflected a sense of “fairness.”
“If you keep raising the minimum wage, people lose empathy,” he says. “We’re at the point where Californians think this is unfair to other people.”
“Enough is enough. The state’s voters continue to support so-called progressive policies, but they draw the line when it affects the cost of living and quality of life.”
— Giotto Condi, President and Chief Executive Officer of the California Restaurant Assn.
In reality, the effects of minimum wage increases on inflation and unemployment are complex and hotly debated.
Proponents of Proposition 32 argued that raising the minimum wage would stimulate the economy, improve the standard of living for low-income workers, and reduce job turnover. They argued the new standards were needed to address the state’s exorbitant cost of living.
The campaign estimates more than 2 million California workers will benefit from the measure, which was led by billionaire investor and anti-poverty activist Joe Samberg.
“The fight for higher wages and economic dignity for millions of California workers does not end here,” Samberg said in a statement Tuesday night. “The fight for higher wages and economic dignity for millions of California workers does not end here. I’ll keep going until I get it.” “While today’s results were not what we expected, we are looking forward to our future efforts.”
Opponents argued the measure was bad for both consumers and workers. They were concerned that companies would pass on excess labor costs to customers through higher product prices and seek to save costs by cutting jobs, reducing working hours, and replacing workers with automation. .
“It was very easy to vote no,” said Bill Bender, 70, a restaurant operations consultant in San Jose. “It’s too much and too fast for the industry to absorb.”
In California, there is a recent real-world case study to consider for raising the minimum wage, which may have been factored into voters’ decision-making. In April, wages for fast food workers in the state jumped to a minimum wage of $20 an hour. The increase established by Assembly Bill 1228.
Thanks to this new law, many cashiers, line and prep cooks, counter staff, and baristas received raises of as much as 25% overnight. The law applies to California fast food workers employed by any chain with 60 or more stores nationwide, and also covers businesses. Owned and franchised stores.
Fast food giants such as Chipotle, McDonald’s, Starbucks, Jack in the Box, and Shake Shack planned to increase menu prices as a result and let customers eat the cost even before the system began. He warned me that there was.
“Fast food consumers are very unhappy with the price increases they are seeing,” said Jot Condi, president and CEO of the California Restaurant Association, which opposes Proposition 32. “They’re just connecting the dots and saying: This $18 hourly minimum wage would increase prices across the board. ”
McDonald’s in Azusa. The company threatened to raise prices after California’s fast-food minimum wage hike went into effect in April.
(Robert Gauthier/Los Angeles Times)
Michaela Mendelsohn operates six El Pollo Loco stores in Los Angeles and Ventura counties. She said she supported Proposition 32, even though she believed raising the state’s minimum wage would lead to higher prices. She said that’s because Prop. 32 would narrow the gap between what she and other fast-food restaurants have to pay their workers and what they have to pay non-fast-food employees. -Food company pays.
Since the state raised the hourly wage for fast food workers to $20 an hour, Mendelsohn has seen business volume at his six stores drop 5% to 8% from a year ago, and he has cut his total work hours by 8%. He said it has been reduced by 10%.
David Newmark, an economist at the University of California, Irvine and a national expert on the minimum wage and its economic effects, said he was surprised by the results and said it was difficult to pinpoint a single factor in the measure’s failure. said it was difficult.
His years of research show there are economic trade-offs in raising the minimum wage. While some low-income workers benefit from higher wages, overall employment declines as employers cut back on higher costs, hurting their economic well-being. working poor and low-skilled people.
While it’s a commonly accepted theory that raising the minimum wage can lead to job losses, UCLA’s von Wachter said that’s not necessarily the case.
“The argument that higher wages lead to fewer jobs doesn’t have much evidence to support it,” he said. “Rather, raising the minimum wage can increase employment in situations where employers have some market power.”
California voters are predominantly Democratic, and a high minimum wage is generally consistent with left-wing values, but voters on both sides of the aisle did not follow typical partisan trends when it came to Proposition 32.
Randy Jeffs, a Republican from Irvine, said he did not vote for a presidential candidate last week. But he voted in favor of Prop. 32 after calculating that a higher-paid worker would only earn $37,440 a year working a full-time 40-hour week.
“If prices have to go up a little bit to pay the $18 an hour minimum wage, that’s OK,” said Jeffs, 70. “If you want to spread wealth, what better way than to spread it to people who want to learn?” [and] work? “
But in the end, most voters decided “enough is enough,” Condie said.
“The state’s voters continue to support so-called progressive policies, but they draw the line when it affects the cost of living and quality of life,” he said.
