Living on the wages of the year 2000 |

Living on the wages of the year 2000

The Golden State is notorious for its high cost of doing business. So it was no wonder that business groups were not rallying behind the recent proposal to boost California’s minimum wage.

But the state Senate did just that recently, sending the ball into the Assembly’s court that would hike the current $6.75 per hour to $7.50 next January and $8 in January ’08.

With the prospects good that the Assembly will pass the measure, just about every news report on the issue reads something like “The hike in the minimum wage makes California the highest in the nation.”

Well, yes and no.

The deal Gov. Arnold Schwarzenegger cut with state Democrats was that he’d not veto a hike as long as it wasn’t tied to inflation.

Allow me to translate: Politics. It’s an election year. The governor can say he helped raise the minimum wage from now until November. Labor types leveraged the fact that it is an election year and got the hike. In doing so, however, they didn’t get the annual cost of living increase that Schwarzenegger wasn’t going to budge on anyway.

So if history repeats itself, which it often does in politics, California won’t be the “highest minimum wage state” for long ” if it ever was.

Just as the Golden State is notorious for its high cost of doing business, the same can be said for just living.

The 1.4 million minimum wage workers in California haven’t seen a raise in the rate since 2002. What has risen, however, is inflation and the basic cost of keeping the household running ” think gas.

Because of inflation, the minimum wage as it stands now is 11.5 percent lower than it was in 2002, according to Frank Russo, publisher of the California Progress Report. If the state’s minimum wage had been indexed over those four years it would currently be $7.63 and a lot closer to being even with the cost of living.

So, yes, millions of workers will see a bump in their wages. But what happens after 2008? Will they have to wait for politics to bump them up even with a gallon of gas then?

Tying the minimum wage to inflation isn’t only common sense, it’s common practice at most levels of business in the nation. The federal government dispenses either cost of living increases each year to its employees or gives them raises.

As for California being a progressive leader, think again. Russo reports that Washington state already has a rate of $7.63 per hour that is indexed. Assuming normal inflation, it will be well over $8 per hour in 2008. Oregon is already at $7.50 per hour, Connecticut is at $7.40 per hour.

Where is California? Trying to get past politics and out of 2000.

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