As a Texan, let me say, “Thank you, Governor Brown!”
Texas has benefited immensely from the Golden State’s determination to send its best employers and jobs to the Lone Star State, and it looks like those relocation efforts will continue—for years to come.
California Governor Jerry Brown just announced his plan to be the first state in the union to raise the minimum wage to $15.00 an hour, up from $10.00 an hour now.
The Democratically controlled state legislature—whose members are eager to claim they are giving a raise to lower-income workers while forcing employers to pay for their vote-buying largesse—will almost surely support the legislation.
The increase won’t be fully phased in until 2022—unless, of course, the state’s Democrats decide they want to accelerate the timeline to, say, 2020, or raise the wage even higher, which would make sense from their perspective.
Since supporters have convinced themselves that such a big minimum wage increase creates jobs and grows the economy, then imposing a $20.00 or $25.00 per hour minimum wage hike would be all economic upside.
But, of course, hidden in all the happy talk are the other wage increases that will be required. If a company’s starting wage is $10.00 an hour, while people with months or even years of experience are getting $12.00, the latter won’t be happy being bumped up to $15.00 with the starters. They will reasonably want $17.00 or $18.00 an hour to recognize their seniority and experience.
In other words, the minimum wage increase is likely to push up wages for many making more than the minimum wage—which employers will have to cover.
California’s love affair with taxes, regulations and nanny-state obsessions has encouraged many of its businesses to “disinvest,” i.e., leave the state. By one estimate there have been some 9,000 disinvestments between 2008 and 2014. And the majority of those companies came to Texas.
Assuming the legislature passes Brown’s minimum wage bill, we can expect that number to rise even faster.
Former Texas Governor Rick Perry and current Governor Greg Abbott are doing their best to create jobs in Texas, but the governor doing more than anyone to create Texas jobs is—Jerry Brown.