Better East Texas: How California's minimum wage increase impacts Texas

Better East Texas: How California's minimum wage increase impacts Texas

EAST TEXAS (KLTV) - State legislators in California reached a deal increasing the minimum wage in the state to $15 an hour.

It still has to be passed by the legislature but approval is probable. California already has one of the highest minimum wages in the nation at $10 an hour and the increase to $15 happens in steps during the next few years.

If you are employed and making less than $15 an hour, this sounds good on the surface. But this is short sided because while it looks great to many wage earners, the money to fund the increase will have to come from somewhere.

Some of the most recent data on the U.S. workforce shows that nearly 90 percent of all workers work for small businesses – those businesses with less than 20 employees. Those small businesses already have downward price pressure from the likes of Walmart and other big box retailers.  Many are fighting the effects of Obamacare as well.

So, the only source for a minimum wage increase will be to raise prices – inflation – so the end result is that $15 becomes the bottom of the pay scale and prices will increase for consumers so ultimately nothing is accomplished.

The other option is that workers will lose their jobs because employing them becomes too expensive. California already has a high minimum wage and it allegedly is not enough – so proponents think increasing it again will solve problems. It won't and it will ultimately drive more businesses to states like Texas.

So, in this case of California Dreamin', Texas may win.

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