Business

$15 Minimum Wage Sends California Businesses Fleeing

California businesses are already starting to move out of state less than a month after lawmakers raised the minimum wage to $15 an hour, according to reports Monday.

California beat New York by a couple hours April 4 to become the first state to raise its minimum wages to $15. The new law is a huge victory for advocates who had previously only seen success on the city level.

Now, businesses are already starting to leave the state in response to the upcoming increase.

“It’s been less than a month since California passed legislation to hike the minimum wage to $15 and disastrous impacts are already being felt,” America Rising Squared Communications Director Jeremy Adler said in a statement to The Daily Caller News Foundation. “Between companies leaving the state, employees being laid off and workers getting replaced by robotic automation, it’s clear that the economic consequences of this move will only serve to hurt workers and the private sector.”

Supporters of the minimum wage increase argue it could help lift people out of poverty. The opposition warns raising the minimum wage to $15 an hour could actually hurt the very people it’s supposed to help. Employers could be forced to cutback workforces or raise prices to overcome the added cost of labor.

California Composites, which makes airplane parts, announced Monday it will have to leave the state, reports KPCC. Five Loaves Two Fish Clothing’s owner told KOGO the new law will be devastating for her business.

Inland Empire Economist John Husing told the Los Angeles Daily News the increase will likely cause more businesses to automate. Low-skilled jobs like cashiers which have allowed young people to enter the workforce are starting to be done by touchscreen computers and machines.

The Fight for $15 movement has been at the forefront of the minimum wage push. It has utilized rallies and media marketing campaigns to advocate for the policy. In just a few years the movement has made the increase an important policy issue. It has been marketed as a grassroots movement, but skeptics express doubt.

The Service Employees International Union (SEIU) indirectly spent $18.6 million on the movement in the past year alone. Some have accused the movement as being an organizing drive for the SEIU since unions are restricted by law on how they can unionize workers. Nonunion labor groups aren’t restricted in the same way but are forbidden from organizing workers without filing a petition for an election.

The nonpartisan Congressional Budget Office found both positive and negative results from increasing the minimum wage. It found any increase in the minimum wage will likely result in at least some job loss. The University of California, Berkeley found in a recent study that having less people in poverty outweighs the potential job loss.

The Fight for $15 movement did not respond to a request for comment TheDCNF.

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