Governor earns the wages of pandering
The downside of trying to pander to one's opponents is highlighted in the way Gov. Arnold Schwarzenegger has handled the debate over raising the state's minimum wage. Rather than explain the problems with wage hikes, the governor has tried to move left and prove that he, too, cares about working stiffs by proposing a law forcing employers to pay $7.75 an hour rather than the current mandated $6.75.
Instead of agreeing with the governor, the Democrats in the Legislature viewed his proposal as an opening bid. The Senate Labor Committee bottled up the governor's plan this week, refusing to vote on it. That was SB1167, and, according to The Sacramento Bee, it would have limited the hike to a dollar and then required new legislation for future hikes.
The Democrats in the Assembly and Senate Labor Committees did approve two different minimum-wage bills that would index the wage - meaning that it would go up in tandem with the rate of inflation. “Without the indexing, all we're doing is sort of pandering to the governor's trying to get some credit for a minimum-wage increase but not really taking care of the real central issue,” Sen. Sheila Kuehl, D-Santa Monica, told the San Francisco Chronicle.
We must admit that Sen. Kuehl has a point. As Richard Reeb writes on the Claremont Institute's blog, “(D)epending on the circumstances, they (minimum-wage laws) either force the cost of business up or they are merely ‘feel good' legislation the authors of which try to take credit for what the market has already accomplished.”
In other words, an increase is either meaningless a) because the market already pays wages higher than the minimum wage, or b) is harmful because it imposes new costs on businesses, making them less likely to hire lower-wage workers. But, as Reeb notes, the governor has abandoned the chance to make a principled economic case because he is too busy pandering for votes. What can he say now?
According to the logic of minimum-wage supporters, higher mandated wages help the working poor and even help the economy. If so, then the government should spike the minimum wage, mandating, say, $100,000 a year for anyone who has any job. We all know what that would mean - the destruction of the economy. The only question, then, is of degree.
A $1 increase is a bad idea because the government should not tell businesses what they should pay for labor. Willing workers should connect with willing employers without such mandates. And, of course, if the law pushes wages up, then it hurts the people the law is trying to help.
Because the governor never made any principled point, he is stuck in a losing situation.