Wage hike bill sparks debate

Local assemblymen oppose legislation to boost the minimum wage, but chamber president backs it.California’s minimum wage has not been raised since 2002. Could 2006 be the year when minimum-wage earners get a boost to their paychecks?

Gov. Arnold Schwarzenegger thinks the answer should be yes. Legislation to hike the state minimum wage by $1 over 18 months was introduced in the California Senate last month.

Both of the Republican assemblymen representing Newport-Mesa, however, think it’s a bad idea.

“I don’t think the government should be in the business of setting the minimum wage to begin with,” Newport Beach Assemblyman Chuck DeVore said.

Costa Mesa Assemblyman Van Tran offered the view that an increase in the minimum wage should be the product of a discussion between employers and employees. He also said that he did not foresee any significant market changes that would necessitate such an increase.

Reaction at the local chambers of commerce was mixed. Costa Mesa Chamber of Commerce President Ed Fawcett said he was displeased with the proposal. On the other hand, his counterpart at the Newport Beach chamber, Richard Luehrs, said his organization may support the proposed increase, though the Newport chamber traditionally has opposed such proposals.

“Frankly, I’m not sure we’re going to oppose the governor’s proposal this time,” Luehrs said.

The chamber’s directors have yet to take an official stance on the proposed wage hike, Luehrs added, though the fact that the state’s minimum wage has not been raised in four years may tilt the chamber toward agreeing with the new proposal.

While Fawcett said he believes there is room to discuss upping the minimum wage, he thinks Schwarzenegger’s support for a wage increase is motivated by political concerns.

The bill was introduced Tuesday by Abel Maldonado, a Republican state senator representing Santa Rosa. If the bill passes, California’s minimum wage would increase from its current rate of $6.75 to $7.25 on Sept. 1, then another 50 cents to $7.75 in July 2007.

In September, the governor vetoed a similar bill introduced by Mountain View Assemblywoman Sally Lieber, a Democrat. The key difference between the Lieber and Maldonado bills is that Maldonado’s proposal would not mandate future minimum-wage increases tied to inflation, as Lieber’s did.

Schwarzenegger vetoed Lieber’s bill because of its “autopilot” provision, but DeVore anticipates Democrats will attempt to insert similar language into the new bill.

For consumers, the likely impact of a minimum-wage increase would be higher prices, Luehrs said.

“If it costs 50 cents or $1 more to put a plate to the customer, chances are you’re going to paying $1 more,” he said.

The issue is “much ado about nothing,” in the view of UC Irvine economist Richard McKenzie. McKenzie said that if the bill passes, prices will not increase much. He expects that employers required to pay higher wages will both ask employees to do more work and reduce benefits such as flexible scheduling or employee discounts.

* ANDREW EDWARDS covers business and the environment. He can be reached at (714) 966-4624 or by e-mail at andrew.edwards@latimes.com.