California’s minimum wage hike to cost taxpayers billions

California’s minimum wage hike to cost taxpayers billions

California Gov. Jerry Brown and other lawmakers’ decision to increase the minimum wage to $15 an hour over the next few years, but will cost the state’s taxpayers nearly $3.6 billion more annually in government pay alone, legislative analysts projected.

The estimated figure of the additional burden is quite heavy; still it just the tip of the iceberg in terms of additional costs to state taxpayers. The increase in the minimum pay will boost employers’ costs, which would eventually lead to countless jobs cuts.

According to an estimate by the American Action Forum, the increase will cost the state as many as 700,000 jobs. Economist Adam Ozimek calculated that up to 160,000 manufacturing jobs will be lost. The job cuts will likely boost the state’s welfare costs as many more people will seek welfare benefits.

Before becoming governor, Mr. Brown said in 1995, “The conventional viewpoint says we need a jobs program and we need to cut welfare. Just the opposite! We need more welfare and fewer jobs.”

He also hinted at potential job losses due to increase in the minimum wage before signing the bill into law, when he said minimum wages mayn’t make sense. Economically, but they do make sense morally, socially as well as politically.

California’s minimum wage is scheduled to gradually increase over the coming many years, with the $15-an-hour minimum wage set to kick in 2022.