close
close

Arizona will lose if it follows California's minimum wage disaster


Opinion: The minimum wage increases in California were a disaster for the state. This should serve as a warning to power-hungry Democrats in Arizona.

play

Arizona has followed the California model in recent years and has increasingly elected Democrats.

Our state's Democrats currently hold the governor's seat and the mayoral offices in Phoenix, Tucson and Flagstaff, and they could potentially win a majority in the state legislature in November.

Whether they do or not, they will want to learn an important lesson from the Democrats next door who govern almost exclusively California:

Don't think you're smarter than the economy.

The minimum wage in California is an economic burden

Democrats in California decided to play God with their economy and created some of the highest minimum wages in the country.

The federal minimum wage is $16, the third highest in the country after the District of Columbia and Washington state. Last September, California also implemented a new minimum wage of $20 for its fast-food industry.

California has inflated the value of labor in its own state far beyond its actual price, leading to economic distortions and serious consequences.

Almost every week there is new evidence that California's rapidly rising minimum wage is a burden on the economy and a job killer.

The latest story comes from the Sunday edition of the Los Angeles Times and says that high labor costs are ruining the state's asparagus industry, once considered the “king of vegetables” in the Golden State.

At its peak, 37,000 hectares of asparagus were grown in California. Now that number has dropped to less than 3,000 hectares, the newspaper reported.

Wage laws drove the asparagus industry into ruin

The decline actually began with the North American Free Trade Agreement of 1994, which was later replaced by the 2019 agreement between the United States, Mexico and Canada, industry spokeswoman Cherie Watte told trade magazine The Packer.

In 2022, when acreage was already beginning to shrink by about 10 to 15 percent per year, California raised the minimum wage to $15 an hour and eliminated the overtime exemption for agriculture.

“The resulting regulations in California – both the minimum wage and the elimination of our overtime exemption – were the final nail in the coffin,” Watte said.

“We simply cannot produce such a labor-intensive good in a state with such high wages and labor regulations.”

Craig Rolandelli, whose family has been growing California asparagus for five decades, had to switch his operation from growing the vegetable to importing it from other countries, he told The Times.

“NAFTA is not to blame for the asparagus crisis in California. I would blame the cost of doing business in California. At $10 an hour, we were competing with Mexico. At $12 an hour, we were competing with Mexico.”

As soon as this wage exceeded 12 dollars, Californian asparagus farmers could no longer compete with Mexico, where the daily The minimum wage is about $14, the Times reported.

Higher wages have depressed wages and destroyed jobs

This has had consequences that the state's Democrats certainly did not expect.

For example, 56-year-old Maria Pineda told the Times that she was praying in the hope that California's asparagus industry would survive.

She is from El Salvador and works as an asparagus packer in Turlock, California, east of San Jose. As the Times reported:

“Although she believes lawmakers may have had good intentions when they tried to look out for her and other workers' well-being, she said the law ultimately hurt her. She used to work 10 to 12 hours a day, made more money then than she does now, and was able to better provide for her family.”

Painful boycotts await you: If Arizona voters pass immigration law

A new analysis by nonprofit news channel Stateline shows that states with lower wages and costs of living, such as Texas, Florida and Arizona, are creating more new jobs than states with high wages and high costs of living, such as California, New York and Washington state.

“Employers are less willing to create new jobs in higher-wage states,” says Stateline's Tim Henderson. Additionally, as more workers have the option to work from home, they are choosing to move to less expensive states.

The result: California has “fallen to its lowest point in job creation,” he wrote.

Nevertheless, California continues to raise the minimum wage

That won't stop the Democrats in the Golden State. California and its cities are ready to impose their will on the free market even more. They don't care about the consequences.

In March, Long Beach voters decided to raise the minimum hourly wage for hotel workers to $23, which will rise to $29.50 an hour by 2028.

The Los Angeles City Council is considering raising the minimum hourly wage for hotel and airport workers to $30 by 2028.

San Diego unions are pushing for a $25 minimum wage for hotel, cleaning and convention workers in the city.

And this fall, California voters will decide whether to raise the state's minimum wage to $18 an hour. In a January poll, nearly 60 percent of voters said they would support the proposal.

California is asking for trouble with its indifference to economic principles, says Tom Manzo, president and founder of the California Business and Industrial Alliance.

“Prices can only be raised to a certain extent,” he told Fox Business. “People are not going to pay $20 for a Big Mac. That's not going to happen.”

Phil Boas is a columnist for The Arizona Republic. You can reach him by email at phil.boas@arizonarepublic.com.

Anna Harden

Learn More →

Leave a Reply

Your email address will not be published. Required fields are marked *