There are three immutable aspects of economic life in California today.<\/p>\n
No. 1, Californians face the nation\u2019s highest cost of living. It is 11% higher than the national average, according to the federal\u00a0Bureau of Economic Analysis, including rents 53% higher than average and utilities 63% higher. It\u2019s why California also has the\u00a0nation\u2019s highest poverty rate.<\/p>\n
No. 2, the high cost of living, especially for housing, is the most important factor in the out-migration of Californians to other states. It has led to a net loss of 900,000 people since 2015, according to the\u00a0Public Policy Institute of California.<\/p>\n
No. 3, California\u2019s unemployment rate,\u00a0currently 5.3% of its labor force, has been among the highest of any state for the last half-decade, with more than a million jobless workers. It\u00a0rises to 10.1%\u00a0when it\u2019s broadened to\u00a0discouraged job seekers and those who work part-time\u00a0but want full employment. This alternative measure is also the nation\u2019s highest.<\/p>\n
The response to these economic conditions from the state\u2019s mostly Democratic politicians has been an amalgam of high concept policy changes, one-time or short-term allocations of relief money and micro-managing wages.<\/p>\n
Gov. Gavin Newsom and the Legislature, for example, have enacted dozens of laws and administrative directives aimed at making it easier to build new housing, especially for low- and moderate-income families and, in theory, tempering housing costs.<\/p>\n
However, the actual rate of new housing construction of all kinds has been stuck at about 100,000 units a year. Newsom\u2019s\u00a0latest state budget projects only fractional gains, to about 115,000 units, through 2030.<\/p>\n
When the budget\u2019s revenues allow \u2014 or at least appear to allow \u2014 the state has appropriated funds for direct relief to Californians mired in poverty, such as an\u00a0earned income tax credit\u00a0or even\u00a0cash distributions.<\/p>\n
Increasingly, state and local officials also have responded to ever-increasing costs of living by increasing minimum wages.<\/p>\n
A new report from the Virginia-based\u00a0Employment Policies Institute\u00a0reveals that California is the most active state in setting new and higher wages for specific economic sectors. It has 8 of the nation\u2019s 10 largest local minimum wage increases taking in effect in July.<\/p>\n
When California, after much political angst, decreed a $20 minimum wage for fast food workers three years ago and\u00a0created an agency to oversee\u00a0that industry\u2019s employment conditions, it ignited a debate over\u00a0impact that\u2019s still raging.<\/p>\n
Proponents have ginned up studies that purport to prove that the higher wages had little or no negative effects on employment and consumer prices. Critics have countered with studies saying that $20 wages forced fast food operators to raise prices and reduce their staffs.<\/p>\n
Newsom and the Legislature also set higher wages for healthcare industry employees. Local city and county officials have decreed new wage levels for particular economic segments, such as the hotel industry in Los Angeles and amusement parks in San Diego.<\/p>\n
The Los Angeles City Council set a $30 minimum wage for hotel and airport workers on the theory that travelers from elsewhere would bear the costs, but last month\u00a0postponed implementation until after the 2028 Olympics. In return, the business community canceled a ballot measure to eliminate the city\u2019s gross receipts tax, a major city revenue source.<\/p>\n
The tactic of raising minimum wages to offset rising living costs shows no signs of abating. Currently, for example, the Service Employees International Union is sponsoring legislation,\u00a0Senate Bill 1203, that would increase the training requirements for private security guards but also empower the state Industrial Welfare Commission to set new and presumably higher minimum wages for such guards.<\/p>\n
This may be a circular economic firing squad. Higher wages can lead to higher consumer costs, which increases pressure for higher wages and pushes those caught in the middle, trying to survive, to lower-cost states.<\/p>\n
Dan Walters is a CalMatters columnist.<\/p>\n","protected":false},"excerpt":{"rendered":"There are three immutable aspects of economic life in California today. No. 1, Californians face the nation\u2019s highest…\n","protected":false},"author":2,"featured_media":368267,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[6],"tags":[7,9,8,964,975],"class_list":["post-368266","post","type-post","status-publish","format-standard","has-post-thumbnail","category-california","tag-california","tag-california-headlines","tag-california-news","tag-commentary","tag-opinion"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/us-ca\/wp-json\/wp\/v2\/posts\/368266","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/us-ca\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/us-ca\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us-ca\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us-ca\/wp-json\/wp\/v2\/comments?post=368266"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/us-ca\/wp-json\/wp\/v2\/posts\/368266\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us-ca\/wp-json\/wp\/v2\/media\/368267"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/us-ca\/wp-json\/wp\/v2\/media?parent=368266"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/us-ca\/wp-json\/wp\/v2\/categories?post=368266"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/us-ca\/wp-json\/wp\/v2\/tags?post=368266"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}