California Democratic Gov. Jerry Brown warned against the $15 minimum wage Thursday over the possibility it could disproportionately hurt poor people.
Minimum wage supporters have advocated for an increase in minimum wages as a way to help the poor and championed implementing the wages anywhere possible. Critics, however, warned such an increase in wages could actually hurt the poor by forcing them out of the job market.
Brown is now taking the critics’ lesson to heart. On Thursday, he broke with fellow Democrats and opposed the increase.
“Raise the minimum wage too much and you put a lot of poor people out of work,” Brown told reporters according to the Sacramento Business Journal. “There won’t be a lot of jobs. It’s a matter of balance.”
Brown argued the recently enacted rate of $10 an hour is good for now. He added that the $10 minimum wage increase cost the state $250 million. A $15 minimum wage would be much more devastating by adding an additional $4 billion annually by 2021, according to the state budget summary.
The California Department of Finance released a report in March also urging the state to not go beyond the $10 an hour increase.
Critics have claimed a lot of businesses simply don’t have the profits to handle such an increase. Employers have few options besides increasing costs or scaling back their workers to offset the added cost of labor. In some cases, the businesses may have to close entirely. Low-skilled workers and those new to the workforce are likely to be the worst hit because they often don’t contribute as much to the company.
Currently, there are two union-backed proposals to increase the state minimum wage to $15 an hour. Both measures were introduced by two different local chapters of the Service Employees International Union (SEIU).
The SEIU has played a huge part in the national push to enact a $15 minimum wage, and is one of the main contributors to the Fight for $15 movement. Movement organizers have launched media marketing campaigns and mobilizing efforts over the last few years in favor of the policy.
Currently, the federal minimum wage is $7.25 an hour, with no state passing a $15 minimum wage. California could be the first, but New York Democratic Gov. Andrew Cuomo has already done a lot to push the policy in his own state.
Cuomo already unilaterally raised wages for those working in the fast-food industry, state university workers and state employees. He also introduced a bill Sept. 10 that will gradually bring the state minimum wage to $15 by 2021 if passed by the legislature.
Florida and Massachusetts are both also considering a $15 minimum wage. Seattle was the first city to pass a $15 minimum wage back in June 2014. San Francisco and Los Angeles followed not long after. Some businesses have already reported problems because of the increase.
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