The state of California has recently enacted a $15 minimum wage bill, causing many conflicting opinions.
The business community believes that this new law would reduce opportunities for the members of the working class.
This argument ties back to December of 2015, when the Federal Reserve Bank of San Francisco released a report on the impact of increasing minimum wage. It headlined that if there was an increase, there would be fewer unskilled jobs, as minimum wage is intended to help this demographic.
As of right now, workers in restaurants and retail shops, along with security guards and fast food workers, all receive the state-mandated $10 minimum wage. They receive few to no personal benefits.
These workers are part of the 25% of the population who get no paid vacation time off, according to the Center for Economic and Policy Research. When compared to other countries around the world, French and Italian workers are given 31 days of paid time off, Canadians have 19 days off, and the Japanese 10.
The raise increase will be gradual, growing to $10.50 in 2017 and going up 50 cents every year until it reaches $15 in 2022. All in all, this is a 50% increase in five years.
Economist Christopher Thornberg believe that this increase will make these unskilled workers less affordable to small businesses.
Thornberg tells Pasadena Star-News, “The real effect will be felt by low-income workers. Employers will start hiring more seniors and get rid of entry-level people. They’re going to say, ‘If I have to pay more money, I want experienced people.’ They just won’t hire someone without experience.”
On top of this, workers who currently receive over the minimum wage will see an increase that will reflect the rising standard.