No love for pay hike of one buck

Andrew Edwards

Newport-Mesa’s representatives in the state Assembly plan to vote

against a bill that would raise the state’s minimum wage by one

dollar by July 2007.

The bill, proposed by San Jose Democrat Sally Lieber, also would

mandate automatic annual minimum wage increases starting in 2008.

Future wage hikes would be pegged to inflation.

Assembly members could vote on the bill as early as today. If both

houses of the Legislature pass Lieber’s bill, the measure would still

have to get past Gov. Arnold Schwarzenegger, who vetoed Lieber’s

previous effort to up the minimum wage in September.

A release from Lieber’s office stated the bill was designed to

increase minimum wage earners’ purchasing power. The state’s minimum

wage is currently set at $6.75.

California’s minimum wage is the lowest on the West Coast, but

higher than the federal minimum wage of $5.15 per hour, according to

the Department of Labor.

Republican Assembly members Van Tran, who represents Costa Mesa,

and Chuck DeVore, whose district includes Newport Beach, both view

the bill as unneeded government meddling in the labor market. Newport

Beach Chamber of Commerce president Richard Luehrs and UC Irvine

economist Richard McKenzie also oppose the bill.

“It’s just an anti-business, anti-free market legislation,” Tran

said. Tran believes a higher minimum wage would induce business

owners to raise prices and possibly send jobs to other countries.

Legislators’ efforts to help minimum wage earners by raising their

pay typically backfire, McKenzie argued. He said a 10% wage increase

could decrease teenage employment by about 3%. Upping the minimum

wage, McKenzie added, could also lead employers to erode any benefits

minimum wage earners receive and increase job demands.

“It’s just a bad deal all around,” he said.

The Newport Beach Chamber of Commerce opposed Lieber’s 2004

attempt to raise the minimum wage. Luehrs asserted small business

owners cannot afford to pay higher wages in addition to the costs of

employees’ health insurance, energy costs, workers’ compensation and

lawsuits.

Restaurants, which often pay employees minimum wage plus tips,

would likely become more expensive if the bill passes, Luehrs said.

John Wang, owner of the Golden Dragon restaurant in Costa Mesa,

agreed dinners could have higher price tags if the law requires him

to pay his employees more.

“You’ve got to raise prices; you’ve got to adjust things,” Wang

said.