California’s Employment Hazard
BY: WALL STREET JOURNAL EDITORIAL BOARD
Published in the Wall Street Journal on February 3, 2021
Its cities are already blowing past the $15 minimum wage.
Progressives are never content with their policy victories. Take California, where Democrats have already enacted a statewide $15 minimum wage. But now, even as businesses struggle with declining revenue from pandemic lockdowns, the state’s big city Democrats are mandating that employers increase pay for grocery and other frontline workers to $20 an hour or more.
Democrats say essential workers must be compensated for the risk they take by going to work. The sentiment may be admirable, but it clashes with the reality of the pandemic economy and job market. Most covered businesses have taken precautions to protect workers, including installing plexiglass at checkout counters and requiring masks. They have also increased pay in part to compete with Amazon as well as enhanced federal unemployment benefits of $300 a week.
Unlike Amazon, most of these businesses aren’t rolling in revenue. The pay mandates could increase their payroll by upward of 30%, and many can’t raise prices to cover the cost—especially in low-income neighborhoods. Supermarket chain Kroger on Monday announced it is closing two stores in Long Beach because of the pay mandate.
The United Food and Commercial Workers union, which is pushing the mandates, howled that Kroger is trying to “intimidate and discourage workers from standing up and using their voice to create better working conditions and wages.’’ Unions aren’t used to being confronted so quickly by the economic damage from their demands.
As usual, politicians take the credit for mandating wages, but workers who lose their jobs pay the price.