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  • AZCentral | The Arizona Republic

    Arizona Democrats better learn from California: A $20 minimum wage is a killer

    By Phil Boas, Arizona Republic,

    2024-06-11
    https://img.particlenews.com/image.php?url=2PJudN_0tnYVBql00

    Arizona in recent years has been following the California model of electing more and more Democrats.

    Our state’s Democrats now command the governor’s seat, the mayor’s offices in Phoenix, Tucson and Flagstaff. And they could possibly flip the Legislature in November.

    Whether they do or not, they’ll want to learn an important lesson from the Democrats next door, the ones who almost exclusively run California:

    Don’t think you’re smarter than the economy.

    California's minimum wage is an economic drag

    California Democrats decided to play God with their economy and created some of the highest minimum wages in the country.

    The state minimum wage is $16, third highest in the nation behind the District of Columbia and Washington State. Last September, California also slapped its fast-food industry with a new $20 minimum wage.

    California inflated the value of labor in their state well beyond its real price, and that has distorted the economy and produced serious repercussions.

    Almost every week brings new evidence that California’s soaring minimum wage is a drag on business and a job killer.

    The latest comes from Sunday’s Los Angeles Times, which reported that the price of labor is wiping out the state’s asparagus industry, once considered the “King of Vegetables” in the Golden State.

    At its peak, California cultivated 37,000 acres of asparagus. Now that number is down to less than 3,000, the newspaper reported.

    Wage laws tanked its asparagus industry

    The decline really began with the 1994 North American Free Trade Agreement, which was later replaced by the 2019 U.S.-Mexico-Canada Agreement, industry spokesperson Cherie Watte told the trade publication The Packer.

    In 2022, when acreage had begun to decline roughly 10%-15% per year, California raised the minimum wage to $15 per hour, and eliminated the overtime exemption for agriculture.

    “The resulting regulations in California — both minimum wage and removal of our overtime exemption — were the final nails in the coffin,” Watte said.

    “We just cannot produce a highly labor-intensive commodity in a state with such high labor rates and labor regulations.”

    Craig Rolandelli, whose family grew California asparagus for five decades, has had to switch his business from growing the vegetable to importing it from elsewhere, he told The Times.

    “NAFTA is not to blame for California’s asparagus slump. I would blame it on the cost of doing business in California. At $10 an hour, we were competing with Mexico. At $12 an hour, we were competing with Mexico.”

    Once that wage exceeded $12, California asparagus growers could no longer compete with Mexico, where the daily minimum wage is roughly $14, the Times reported.

    Higher wages have tanked pay, killed jobs

    This has created consequences that state Democrats surely did not anticipate.

    For instance, 56-year-old Maria Pineda told The Times she says prayers hoping the California asparagus industry survives.

    A native of El Salvador, she is an asparagus packer in Turlock, Calif., east of San Jose. As The Times reported:

    “Although she believes that legislators may have had good intentions in trying to look out for her and other workers’ welfare, she said the law ended up hurting her. She used to work 10- to 12-hour days, making more money then than she does now and was able to better provide for her family.”

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    A new analysis by Stateline, a nonprofit news network, finds that states with lower wages and lower cost of living such as Texas, Florida and Arizona are producing more new jobs than high-wage, high-cost-of-living states such as California, New York and Washington State.

    “Employers have been less willing to create jobs in higher-wage states,” Stateline’s Tim Henderson reports. Couple that with the options more and more employees have to work remotely, and they are choosing to relocate to less expensive states.

    The result, California has “crashed to the very bottom in job creation,” he wrote.

    Yet California keeps hiking the minimum wage

    That won’t stop Golden State Democrats. California and its cities are poised to impose their will even further on the free market. The consequences be damned.

    In March, Long Beach voters chose to increase the hourly minimum wage for hotel workers to $23. That will eventually rise to $29.50 an hour by 2028.

    The Los Angeles City Council is considering raising the hourly minimum wage for hotel and airport workers to $30 by 2028.

    San Diego labor unions are pushing for a $25 minimum wage for hotel, janitorial and convention workers in that city.

    And this fall California voters will decide whether to raise the state’s minimum wage to $18 an hour. In a January poll, nearly 60% of voters said they support the proposal.

    California is courting trouble with its indifference to economic principles, said Tom Manzo, president and founder of the California Business and Industrial Alliance.

    “You can only raise prices so much,” he told Fox Business. “People are not going to pay $20 for a Big Mac. It’s not going to happen.”

    Phil Boas is an editorial columnist with The Arizona Republic. Email him at phil.boas@arizonarepublic.com.

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