Layoffs. Lots and lots of layoffs.
It’s already starting.
1. They may not hire the worker at all. Outlawing jobs below a certain pay doesn’t guarantee higher-paid work; it guarantees unemployment for those priced out. If a person’s skills or experience don’t merit $30 in the market, this law has made it illegal for them to earn a wage at all. Consider an immigrant with limited English who might start in hotel housekeeping, dishwashing, or entry-level service jobs. At $15 – $20 an hour, an employer might take a chance and hire them, training them on the job. At $30 an hour, that same employer will likely demand a more experienced, highly productive worker for the role (if the role isn’t eliminated altogether). The rung at the bottom of the ladder gets sawed off.So we’ll see a repeat of what happened when California raised the fast food minimum wage. It is insane to think it won’t happen again. Remember Einstein’s the definition of insanity: “Doing the same thing over and over again, but expecting a different result this time.”
2. Employers substitute and automate. When labor gets costlier, it drives businesses to find ways to get by with less labor. That can mean investing in machines or tech or shifting work onto customers or remaining staff. Many chains curtailed daily housekeeping and never restored it fully (often spinning it as “green choice” to save water, while conveniently saving on payroll).Expect more automation at the airport and hotels: kiosks instead clerks, mobile ordering in airport eateries, robotic floor cleaners. Even trash collection can be automated; Pittsburgh deployed robotic vacuum sweepers. When labor costs skyrocket, technology that replaces that labor suddenly looks a lot more attractive.
In effect, L.A. could make itself even more expensive, driving away the very tourism dollars it’s trying to redistribute.
Are there any economists left in California that are not Marxists? If there are, have they been silenced by The Powers That Be because their warnings don’t support The Narrative?
Why they think that this jump in minimum wage for this particular group will somehow solve problems that can’t be solved in this fashion puzzles me. It merely makes things cost more because the wage raise will cause the cost of services to increase. It ripples through the local economy. It’s no different than when energy costs increase, something that effects the cost of everything. Decisions made in Washington that adversely affect energy prices triggers inflation that generally cannot be offset by other measures.
Will the folks in LA realize they’ve made a mistake and rescind the wage jump? Of course they won’t because they really aren’t all that smart. Look at the people they elect to office as proof of that.