Predictions of impact of minimum wage increase varied
Sept. 30, 2013 2:14 a.m.
A recent vote by California legislators to bump the state’s minimum wage from $8 to $10 an hour by 2016 has left many questions about how the new law will affect state, local and UCLA job markets.
Gov. Jerry Brown signed Assembly Bill 10 on Wednesday, increasing the state’s minimum wage from the current $8 to $9 by 2014, then to $10 by 2016. Once the raise is completed, California will have the highest minimum wage in the country.
UCLA officials said they are not yet sure how the change will affect minimum-wage jobs on campus.
More than 2,000 on-campus workers currently earn less than $10 an hour, said UCLA spokesman Tod Tamberg in an emailed statement.
Many of UCLA’s on-campus employers do not anticipate student workers will face significant change.
UCLA Dining Services and Housing Services believe their student worker hiring practices will not be affected, Tamberg said.
Work-study students, who typically earn about $10.30 an hour or higher, will not be impacted, said Ronald Johnson, director of the Financial Aid Office.
Bob Williams, the executive director of Associated Students UCLA, which runs most on-campus restaurants and stores, said in an interview that it is too early to tell what the impact of the wage increase will be. He added that ASUCLA will try to hire and retain as many students as possible.
At an ASUCLA Board of Directors meeting on Friday, Williams said the wage increase could contribute to “a challenging year.” ASUCLA employs more than 1,500 students. Williams said entry-level pay for ASUCLA jobs ranges from $8.75 to $12.00.
Beyond campus lines, the issue has created a debate about what the side effects of the increase will be.
Among experts, there is disagreement on whether the move will have a positive or negative impact.
Chris Tilly, an urban planning professor at the UCLA Luskin School of Public Affairs, said the new minimum wage will give the working poor more money, increasing their living standards.
Tilly said he thinks minimum-wage workers are more likely to spend disposable income at retail establishments, which could potentially increase retail profits and stimulate the economy.
But according to economics professor Lee Ohanian, an increased minimum wage will create more competition over fewer jobs and shorter hours.
“If the price of labor (for the least-skilled worker) goes up, there will be less demand for these jobs,” Ohanian said.
Ohanian said he thinks increased access to education and government subsidies to employers for hiring low-skilled workers would help minimum-wage workers more than increasing the minimum wage.
Other experts, however, have said that while the increased minimum wage is a step in the right direction, more needs to be done.
“An increase in the (state) minimum wage was long past overdue,” said Katherine Stone, a professor at the UCLA School of Law. “Even though California took a bold step … it is lower than what others would calculate to be a living wage.”
A single adult living in Los Angeles County needs to earn $11.37 to pay for basic necessities like housing and food, according to the Massachusetts Institute of Technology’s Living Wage Calculator.
Stone said she thinks the new law should have included measures that automatically increase the minimum wage to match rises in inflation and living costs.
“You wouldn’t have a political fight every time it would go up,” Stone said.
Patty Gonzalez, a third–year undeclared student, said she would notice a tangible difference from the change. Gonzalez has worked as an ASUCLA cashier and restocker for almost a year and worked full time this summer. She said she currently earns $8.75 an hour.
Gonzalez said that she took the job to help her mother pay the family’s rent. Gonzalez’s mother, who lives in South Central Los Angeles, earns a living by babysitting and catering for parties. Gonzalez said jobs are hard to come by in the South Central area and it can take two to three months to find one.
“If I got paid $10, I would be able to pay off [my portion of] rent all on my own,” Gonzalez said.