California’s New Minimum Wage Could Lead to a More Wage Equality… or More Robots

California’s New Minimum Wage Could Lead to a More Wage Equality… or More Robots

California Governor Jerry Brown just signed into law a bill that will raise the state’s minimum wage from $10 to $15 an hour by 2023. This will make the state, the most populous in the country, the first one to raise the pay level to that extent.

The bill is the ending point of a deal Governor Brown worked on with labor and state Democratic leaders. Both houses of the state’s legislature approved the measure at the end of March, two days after the deal was announced by Brown.

Raising the minimum wage has been a hot topic across the country. In many places in the country, it has remained at $7.25 an hour since 2009. In a country where Millennials with only a high school diploma earn 62%of what the typical college graduate earns, and school tuition is at its highest ever, the minimum wage can determine quality of life and healthcare for many individuals and families.

On the same day that California’s legislature approved the measure, New York Governor Andrew Cuomo announced a proposal to raise the minimum wage gradually in some parts of the state.

The other, and most notable Democratic proponent of an increased minimum wage is Bernie Sanders, the Democratic presidential hopeful, who has called for a raising of the federal minimum wage to $15 an hour by 2020.

Some moderate Democrats, and many Republicans, have voiced complaints that the bill was rushed through, and that it would hurt businesses in poorer parts of the state. They argue that there are some places where the cost of living is not high enough to warrant such a big wage increase.

The bill is expected to give a major boost to the newly flourishing robot and automation industry in Silicon Valley. Rising wages will give automation a foot-up, because there will be a greater incentive to replace labor with capital. Unfortunately, this may disproportionately affect the lower paid workers in California.

The fear that robots will soon totally take over the jobs of humans may be slightly unfounded, however. As Andra Keay, the managing director of Silicon Valley Robotics said, “One of the things I’ve noticed looking into technology roll out over the last couple of centuries is how surprisingly same the unemployment rate remains.”

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