A Lone Voice – Voting Against the Minimum Wage Hike in L.A.

Minimum wage1City Councilman Mitchell Englander was the lone no vote against raising the minimum wage in Los Angeles to $15 an hour. It would be over the top to suggest his stand was akin to Gary Cooper in High Noon — one man standing against the threat to the town – but suffice it to say it was important for someone to stand up and point out the concerns raised by the business community and others. The minimum wage issue is not as clear-cut as the lopsided vote in the L.A., City Council would indicate. Important issues surrounding the implementation of the minimum wage must be raised.

Englander explained his reasoning in a Los Angeles Times opinion piece last Monday.

Some excerpts:

“This wage increase may hurt the very people it is designed to help. Most minimum wage jobs are in low profit-margin industries or small businesses that are easily relocated to one of more than two dozen cities bordering Los Angeles. Many of these cities have minimum wages substantially lower than $15 an hour. This competitive disadvantage doesn’t support local job creation or retention.”

“Representatives of both the business and nonprofit/charitable communities testified that they will be forced to reduce hours or staff size to comply with the new policy.”

“Minimum-wage increases by themselves do nothing to expand the middle class. In order to do this we need to create an educated workforce, bringing back trade training and shop classes to our high schools and encouraging a clear and affordable pathway from two-year colleges to four-year universities and beyond.”

“I voted no on the increase because cost-benefit analyses show that the disproportionate burden to business is not balanced by a guaranteed benefit to the impoverished, or to the local economy.”

Englander’s reasoning obviously did not sway other members of the council. But while the city can create laws to control business – one law they are discussing is to require a minimum wage for workers whose home base is outside of Los Angeles but their work brings them into the city for at least two hours – city council members cannot repeal the laws of economics. They will be consequences to the council’s actions.

The minimum wage increase is not the only mandate faced by many businesses in California. Required minimum wages, mandated time off, fees, and taxes add to business costs making it tougher and more complicated to do business in California.

Englander was right to make his lonely stand so that these issues can be aired and remembered.

Originally published at Fox and Hounds Daily

Fed’s monetary policies stoke income inequality

MoneyIncome inequality has been in the public consciousness recently, causing policymakers to redouble our efforts to remediate poverty and preserve what is left of the middle class. But aside from a small group of contrarian economists, few people, and most certainly few policymakers, have been willing to discuss the primary cause of income inequality in the last generation.

When Congress created our central bank, the Federal Reserve, its missions were to be a “banker’s bank,” a lender of last resort for banks whose deposits were overextended or loans oversubscribed, and to hold enough gold in reserve to meet the needs of the nation during economic panics. Those functions are how it got its now somewhat deceptive name, which implies that the Federal Reserve is a place where money is stored “in reserve.”

In modern times the Federal Reserve’s primary undertaking has been tinkering with interest rates, to fulfill its modernized mandates of controlling inflation and assuring full employment. It hasn’t done a great job at either, and has created a damaging wealth disparity that will affect our nation for generations.

American wealth disparity now exceeds the vast chasm of the Gilded Age, immediately before the Great Depression. Income inequality in the U.S. is so extensive that our own CIA compares us to such kleptocracies as Cameroon and Russia. A short, 10-minute drive through Los Angeles exposes this disparity, in our own backyard. California of the future runs the risk of devolving into Marie Antoinette’s France, where the oblivious rich ostentatiously display their fortunes, while scores of commoners look on with a mix of envy and rage.

The Federal Reserve plays the predominant role in this condition. In the last decade, it has created trillions of dollars and kept interest rates epochally low. “Printing” money invariably leads to inflation somewhere, and for a long time, the Fed’s actions drove up the cost of everything from food to gasoline. To avoid runaway inflation, our nation had to change. The last domino before runaway inflation is wage inflation. To keep up with the rising cost of goods, wages must increase too. But this has not happened. The average family today makes about as much as they did in 1980.

This is because the system — Congress, corporations, and covetous world leaders — instead reacted with globalization, i.e., free-trade agreements and a complete liberalization of trade and tariff policies that took jobs like manufacturing, previously done by well-paid Americans, to sweatshops overseas. Many American families can no longer afford the things we want, from air conditioners to iPhones, unless they are made overseas with $5-a-day labor.

But the Federal Reserve’s biggest contribution to wealth disparity, and the one that will take generations to change, is the effect of its money-printing policies on asset prices. The newly created money cascading down Wall Street must be invested somewhere.

The property and stock-market bubbles, which the Federal Reserve now acknowledges it created, have benefited the gentry, because the rich own far more property and stocks than the poor. When those assets geometrically expand in value but wages stagnate, the result is tremendous wealth disparity. Yet when the Fed-created bubbles contract, the middle-class wage earners foot the bailout bill.

Are there small-scale solutions available to policymakers? Sure. For example, I support raising the minimum wage. But many of these efforts amount to using a squirt bottle to extinguish a three-alarm fire. They are not enough. Raising someone’s pay from $25,000 a year to $29,000 every 10 years will not foster a more egalitarian society if easy-money policies continue to expand geometrically the vast fortunes of the fantastically rich.

The people who created our nation explicitly prohibited royalty, and warned that vast concentrations of wealth could make our nation like the tumultuous societies many Americans tried to escape. Lawmakers at every level of government — and citizens, alike — should question the monetary policies of the unelected Fed bureaucrats. I fear that their far-reaching decisions are enshrining an inequality in our society that no legislation at the federal, state or local level can ameliorate.

Assemblyman Mike Gatto, D-Burbank, represents the 43rd District.

Originally published by the Los Angeles Daily News

Do L.A. Council Members Pay Their Gardeners, Cleaners at Least $15 an Hour?

Amid Los Angeles City Hall’s push to raise the city’s minimum wage to $15 by 2020, some city lawmakers say they already are paying at least that hourly rate to the gardeners, housekeepers and baby sitters who work at their homes.

South LA and downtown City Councilman Curren Price, who co-introduced the minimum wage ordinance, employs a housekeeper and pays her more than $20 an hour, a Price spokeswoman said.

Price declined to release her name, citing privacy concerns.

On the east side of Los Angeles, City Councilman Mitch O’Farrell pays two gardeners $60 a month for about an hour’s work total at his home, an O’Farrell spokesman said.

Like Price, O’Farrell — and the other council members who responded to this news organization’s questions about outside workers — declined to release the names of the workers.

Council members earn $184,610 annually, among the highest in the country for city lawmakers.

Those making the $9-an-hour minimum wage earn about $16,000 annually, according to a UC Berkeley studycommissioned by Los Angeles Mayor Eric Garcetti.

Asked what hourly wages council members pay for household services, about half the 15-member council declined to comment or didn’t respond to the request.

City Councilman Felipe Fuentes, who represents parts of the San Fernando Valley, has contracts with businesses that provide household services and a child care provider, all of whom he pays above $15 an hour, his spokeswoman said.

The councilman also pays for vacation and sick time, she said.

Valley Councilman Bob Blumenfield and his family also hire employees to handle home maintenance and child care-related tasks, a Blumenfield spokesman said.

Those employees “earn decent wages in excess of $15 per hour in addition to vacation, sick time, social security and other benefits,” the spokesman said.

The hourly mean wage for housekeepers and cleaners in the greater Los Angeles metropolitan region is $12.17, according to the U.S. Bureau of Labor Statistics. The figure is $11.06 for child care workers.

Amid sometimes emotional debates about the minimum wage and economic inequality, several council members have cited their humble upbringings in arguing for a citywide pay hike.

At a council meeting two weeks ago, Price recalled growing up in a working-class family in South LA, while Councilwoman Nury Martinez said her father made $13,000 a year as a dishwasher.

In raising wages, Los Angeles is poised to join Oakland, San Francisco and Seattle in hiking citywide pay.

Garcetti first proposed the hike last year, telling crowds at a South LA event that the city’s $9 wage is a “poverty wage.”

Garcetti resides in the Getty House, the official mayoral residence, with his family. Garcetti spokesman Jeff Millman said the mayor pays any worker in his household “at least” $15 an hour.

At least three City Council members — Gil Cedillo, Tom LaBonge and Bernard Parks — said they don’t hire any outside workers. Parks, who has two grandchildren, said: “I baby-sit periodically for free.”

Originally published by CityWatchLA.com

(Dakota Smith covers City Hall for the Daily News.  She can be reached  at dakota.smith@dailynews.com. Posted originally by the Daily News.)

Union Hypocrisy At Its Worst

Just a week after the L.A. City Council voted in support of a $15 minimum wage, Rusty Hicks, the head of the Los Angeles County Federation of Labor and co-chair of the “Raise the Wage” campaign, has requested that unions be exempted from the higher wages for their members.

Hicks released a statement praising the City Council’s decision on May 19:

“We are one step closer to making history in Los Angeles by adopting a comprehensive minimum wage policy that will change the lives of hundreds of thousands of hard-working Angelenos. The City Council’s action today creates a path for workers to succeed and gives our economy the boost it needs to grow.”

But early last week, Hicks released another statement following his request for union exemption:

“With a collective bargaining agreement, a business owner and the employees negotiate an agreement that works for them both. The agreement allows each party to prioritize what is important to them. This provision gives the parties the option, the freedom, to negotiate that agreement. And that is a good thing.”

The L.A. Times came out in full swing against the request, calling the request “stunning” and “hypocrisy at its worst”:

“No, employers with a unionized workforce should not be allowed to pay less than Los Angeles’ proposed minimum wage. It’s stunning that after leading the fight for a $15 citywide minimum wage and vehemently opposing efforts to exempt restaurant workers, nonprofits and small businesses from the full wage hike, the Los Angeles County Federation of Labor is now lobbying for an exemption for employers with union contracts. That’s right — labor leaders are advocating that an employer should have the right to pay union members less than the minimum wage.

“This is hypocrisy at its worst, and it plays into the cynical view that the federation is more interested in unionizing companies and boosting its rolls of dues-paying members than in helping poor workers.”

Diana Furchtgott-Roth, the director Economics21 at the Manhattan Institute, provided insight on why union would campaign aggressively for a minimum wage hike and then request to be exempted:

“Although the union-funded Raise the Wage campaigned so vociferously in favor of a $15.25 minimum wage, unions are seeking exemptions from the higher wages for their members. The exemption, or escape clause, would allow them greater strength in organizing workplaces. Unions can tell fast food chains, hotels, and hospitals that if they agree to union representation, their wage bill will be substantially lower. That will persuade employers to allow the unions to move in. …

“Once the higher minimum wage bill is signed into law, with the exemption for unions, then organizing becomes a win-win for employers and unions. Unions get initiation fees of about $50 per worker and a stream of dues totaling 2 percent to 4 percent of the workers’ paychecks. Employers get a lower wage bill.

“The losers in this scheme are employees, who have to pay union dues out of their paychecks. Jobs become more scarce as wage levels rise and some less-skilled workers become unemployed.”

Originally published by CalWatchdog.com

L.A. Minimum Wage Hike: How Will Businesses React?

Photo courtesy of channone, flickr

Photo courtesy of channone, flickr

The Los Angeles City Council tentatively voted to increase the city’s minimum wage to $15 an hour by 2020. The business community opposed the move. How business will react is unclear but there was much discussion during the debate over issues such as lost jobs and companies eyeing more business-friendly locations.

The wage increase is to be phased in over time, so the immediate impact may not be felt. But businesses ought to keep score when the effects hit so that officials will be cognizant of the consequences. If the wage increase does not cause economic disruptions and businesses do not actually leave Los Angeles, the business community’s credibility will suffer in the face of a mere exercise in rhetoric.

The vote to pass the minimum wage increase was 14 to 1. The council gets to vote once more on the measure after an ordinance is drafted by the city attorney, but the lopsided vote indicates there is no turning back. The council even set the wage above the recommended level offered by Mayor Eric Garcetti, who initially proposed an increase to $13.25 an hour.

The city council’s version contains an inflation clause and offers an extra year for small businesses and nonprofits to comply.

However, the business community does not consider these admissions enough. Ruben Gonzalez of the Los Angeles Chamber of Commerce said, “There is simply not enough room, enough margin to absorb a 50 percent increase in labor costs over a short period of time.”

The chamber’s president and CEO Gary Toebben wrote to his members about the many small business owners who testified in various hearings on the measure. He wrote, “They also talked about the likelihood that in order to provide a wage increase for some employees, they would have to reduce hours for others.”

Toebben noted wryly, “Last week, there were banners hanging throughout City Hall celebrating Small Business Week. There are many small business owners in L.A. who don’t feel like the city is celebrating them today.”

Earlier on the day of the vote, the Los Angeles County Business Federation (BizFed) released a survey on business conditions in the area. According to a release from BizFed, “The city of Los Angeles stood out again as being cited most frequently by employers as unfriendly.  Santa Clarita and Glendale were ranked in the top 5 most business friendly cities, which is notable because officials from those two cities are actively courting city of Los Angeles businesses in light of the proposed city of Los Angeles minimum wage increase.” (Author’s emphasis.)

So what will Los Angeles businesses do? Once the minimum wage law takes effect will there be jobs lost or hours cut? How many businesses move to a different location? Business credibility is on the line. Crying wolf and not acting will damage efforts to turn around what many decry as unfriendly business policies.

Originally published by CalWatchdog.com

Los Angeles Jacks Minimum Wage to $15 Per Hour

As reported by the Orange County Register

The Los Angeles City Council gave its initial approval Tuesday to raise minimum pay in the nation’s second-largest city to $15 an hour over the next five years, joining a nationwide movement to boost living standards for the poorest American workers.

“The minimum wage should not be a poverty wage in Los Angeles,” said Mayor Eric Garcetti, who is expected to sign the ordinance once a final draft is approved by the council.

The measure, strongly opposed by city businesses, would affect more than 700,000 workers, including dishwashers, janitors, gardeners, fast-food cashiers, parking attendants and housekeepers.

Los Angeles Councilman Mitchell Englander, the lone dissenter in the 14-1 vote, predicted the raise would lead to …

Click here to read the full article

​Minimum Wage Hikes Hurt the Economy and the Poor

California has raised its minimum wage four times over the past 13 years, with each increase outpacing the federal minimum wage. California’s current minimum wage is 138 percent of the federal level, and with the impending statewide increase mandated by current law in 2016, California will have the highest minimum wage in the country.

Despite clear negative impacts on both California’s economy and low income citizens, Senate Bill 3 (Mark Leno, D-San Francisco) would mandate an additional statewide increase to $13 per hour with annual, auto-scheduled wage increases thereafter.

With another increase already teed up for January 2016, pre-programing additional increases is reckless.  The weight of economic data compels the conclusion that arbitrary minimum wage increases do more harm than good.  Motivated by the understandable desire to help the state’s lowest wage earners, the reality is that they reduce access to jobs for those citizens who need them most and further suppress upward mobility for those clinging to the bottom rung of the employment ladder.

Capitol Matrix Consulting studied the fiscal impact of a $13 minimum wage to the state and, not surprisingly, found devastating consequences.  The study identified a $200 million annual cost to the state due to the recent minimum wage increases already being phased in.  Worse yet, it projects a cost of $860 million to the state in the 2016-2017 fiscal year if the minimum wage is raised to $13.  (Most of these costs are incurred due to increased state payments for providers of In-Home Supportive Services (IHSS) and increased state costs to the Department of Developmental Services (DDS)).

These negative financial impacts would not be offset by any additional revenue to the state.  Paying for burdens would have to come from higher taxes – further accelerating an economic death spiral – or cuts to vital services and fewer public sector jobs.

While Capitol Matrix’s study analyzed the direct fiscal impacts of another increase, the projected costs to the state – totaling nearly a billion dollars a year – do not represent the full impact of such an increase.  Increasing labor costs on California’s millions of small businesses creates additional unintended consequences, including higher prices for the goods and services we rely on and reduced access to jobs for teens and low-skilled workers.  California’s recent minimum wage increase is not yet a year old, and another increase is only eight months away.  These two increases are a 25 percent wage increase in just 18 months, and small businesses are already feeling the pressure to cut hours, eliminate jobs and raise prices.

Like many well-intentioned progressive policies the actual effects of a significant increase in the minimum wage won’t match the promise of helping the working poor – in fact, just the opposite.  For struggling Californians looking for work, what good is an increase in the minimum wage if you can’t get a job?

Jon Coupal is president of the Howard Jarvis Taxpayers Association — California’s largest grass-roots taxpayer organization dedicated to the protection of Proposition 13 and the advancement of taxpa​yers’ rights.

Oakland minimum wage hike burdens businesses, hurts employees

Oakland’s minimum wage rose by 36 percent to $12.25 less than a month ago, but the city’s neighbors to the north in Emeryville are already trying to follow suit. This week, the City Council settled on a plan to increase the minimum wage by 36 percent for smaller businesses, and by 60 percent for larger businesses.

Before acting on this plan, the council would be wise to take a closer look at what’s happening in the city it’s trying to emulate.

Lift up oakland minimum wageOakland’s minimum wage increase was approved by voters in November, following a campaign by proponents in a labor union-backed coalition called Lift Up Oakland. Their argument, which can still be viewed at LiftUpOakland.org, was that increased labor costs would be good for business — indeed, that smaller businesses would even “appreciate” the new mandate.

A team of researchers at the University of California-Berkeley, including a former living-wage organizer from San Francisco, reached a similar conclusion: The costs of the mandate would be negligible, and the benefits would be substantial.

However, a series of news articles published in the weeks since the minimum wage took effect — in publications such as the East Bay Express and the San Francisco Chronicle­­ — suggest that costs of the new minimum wage are real. Restaurants have reported raising prices by as much as 20 percent, hoping customers won’t be turned off. The Chronicle interviewed a member of the Oakland Chinatown Chamber of Commerce, who noted that (predictably) some businesses have closed up shop for good.

To expand on these anecdotes, we worked with a survey research firm and contacted 223 mostly-small businesses in the city between March 23rd and March 25th, all of whom were affected by the wage increase to $12.25. What we found in these conversations was a sentiment far different than appreciation.

Of the businesses surveyed, 56 percent reported a large increase in labor costs. One in five of those businesses who were able to estimate the size of the cost increase pegged it at greater than 20 percent.

Customers might expect price increases following a minimum wage increase, and indeed, 47 percent of surveyed businesses reported raising prices. But the law didn’t just cost customers — it cost employees, too. For instance, 30 percent of the surveyed businesses either reduced their employees’ hours or their hours of operation. Seventeen percent — or about one in six — laid off employees or otherwise reduced staffing levels. Perhaps most concerning, 27 percent of surveyed businesses reported that they were “somewhat” or “very” likely to close their doors altogether.

In follow-up conversations after the survey was complete, we spoke with some of these “likely” businesses. One husband-and-wife team, who’ve owned a sewing business in Oakland since 1990, cut their staff from 5-6 additional employees down to 1-2 additional employees. One of the business owners said they’re going to try this overworked arrangement for 6-12 months — and close down if it isn’t feasible.

At a seafood restaurant in Oakland that’s been open less than a year, a similar dynamic applies. The owner, who used to operate with three additional employees, has cut two people from his staff since March 1st just to make ends meet. His wife sometimes comes in to help with the restaurant. Like the husband-and-wife sewing team, he said it’s possible he’ll close if he can’t make the low-staffing model work.

Child-care providers have also been pinched. The Chronicle reported the Salvation Army’s childcare service was “scrambling” to fill a $146,000 hole that the minimum wage increase ripped in its budget. One small provider I spoke with, Muriel Sterling, has had to make cutbacks for the first time in her business’s existence: Employees are working fewer hours, and she’s posted a sign warning of higher childcare rates to come — which typically means a loss of business.

Members of the Lift Up Oakland coalition have shown a surprising lack of empathy for the damage they’ve wrought. When asked about the deleterious impact on childcare services, for instance, a spokeswoman said they “did not specifically analyze impacts on all industries.” Oops.

She offered that the childcare cuts might not matter, because employees’ higher pay might create a beneficial situation where “less child care is needed in the first place.” This response highlights perfectly the economic illiteracy that underpins these campaigns. Instead of destroying job opportunities for the many in order to give higher pay to a few, we should create more pathways for all to a better-paying future.

It may be too late for Oakland to learn this lesson — but Emeryville still has a chance.

Michael Saltsman is research director at the Employment Policies Institute

Raise the Minimum Wage, or Lower the Cost of Living?

Increases to the minimum wage in California are moving closer to reality. As reported on March 30th by MyNewsLA.com, “Los Angeles County Supervisors Sheila Kuehl and Hilda Solis will ask their colleagues to approve spending up to $95,000 to have the Los Angeles Economic Development Corporation review a series of studies of the issue performed in relation to the city of Los Angeles’ proposal to raise the minimum wage to $13.25 an hour by 2017 and to $15.25 an hour by 2019.”

California’s minimum wage is currently $9.00 per hour. The federal minimum wage is currently $7.25 per hour.

Largely lost in the debate over the “fight for fifteen” (dollars per hour) is America’s inflation adjusted minimum wage based on historical precedents. It’s an interesting topic that deserves discussion, because historical minimum wages expressed in 2015 dollars vary a great deal. Since establishing the first federal minimum wage in 1938, the amount has been adjusted 22 times. As can be seen on the chart, between 1938 and 1968 the minimum wage expressed in 2015 dollars rose steadily. In 2015 dollars, for example, the 1938 minimum wage would be $4.13, rising to $11.01 per hour by 1968. Since then, it has been in decline – in 2015 dollars the minimum wage was roughly between $9.00 and $10.00 per hour during the 1970’s, then fell to roughly between $7.00 and $8.00 from 1980 through 2009, when it was last adjusted.

Historical Minimum Wages
Expressed in 2015 Dollars
20150331-UW_Ring-MinimumWage

Those who believe in minimum wage laws can draw many conclusions from this data. What they cannot easily conclude, however, is that the minimum wage, today, can rise much beyond $10.00 per hour and still conform to historical norms. Only twice, in 1968 and 1974, did the inflation adjusted minimum wage exceed $10.00 per hour.

From this perspective, California’s state minimum wage, $9.00 per hour, finds itself placed almost exactly at the median in terms of historical federal minimum wage levels expressed in 2015 dollars. From what should be a reasonably compelling economic standpoint, there is no urgent reason to increase the minimum wage above $9.00 per hour, even for those who are solidly in favor of having minimum wage laws. While one may argue that California has a higher cost of living than most other places in the United States, justifying a minimum wage higher than the historical median, one might also acknowledge that many of the benefits offered minimum wage earners today were not available until relatively recently. Examples include the earned income tax credit, not established until 1975, and the steep discount on health premiums offered under Obamacare.

It rises perhaps to the level of overkill to join the libertarian chorus extolling the virtues of an utterly unregulated wage market. Also well documented are the many ulterior motives for labor unions to lead the charge for a higher minimum wage – it gives them powerful political rhetoric to address millions of low income workers not represented by a union, and, more pragmatically, a higher minimum wage rewards union members directly whenever – as is frequently the case – their wage scales are pegged a fixed level above the prevailing minimum wage.

Two observations potentially underrepresented in this debate, however, do deserve mention. First, the fact that unions are attempting to fight for workers in low paying, competitive industries, is at least consistent with the illustrious aspects of their legacy. Unlike unions representing government professionals who perform high paying jobs for monopolistic, taxpayer funded agencies, at least the unions fighting for minimum wage workers are fighting for the little guy. If they might abandon their commitment to flood the United States with unskilled immigrants who drive down wages and threaten the solvency of social welfare programs, and if their labor agreements didn’t peg their own wage scales to float upwards as the minimum wage rises, one could almost believe in their sincerity.

The other fact is more challenging and obscure, yet ought to merit a central place in the debate over economic justice. That is the fact that California’s cost-of-living is the highest in the nation. In California’s coastal cities, the cost of housing is prohibitive; the costs for energy, water, and transportation are punishingly high. For middle class residents, the cost of health insurance is punishing as well. And it doesn’t have to be that way. Competitive resource development – free of extremist environmental hindrances, other regulatory roadblocks, costly project labor agreements and union work rules – would lower the cost of living at the same time as creating millions of new jobs. It could usher in a new golden age for California’s working class.

Those unions who fight for a higher minimum wage might consider fighting to lower the cost-of-living instead. But to do so, they will have to break ranks with the public sector unions, who hide behind oppressive environmentalist restrictions, because they know full well that infrastructure development will come at the cost of their own exorbitant compensation.

Ed Ring is the executive director of the California Policy Center.

UC Berkeley Slammed Over Allegedly Biased Minimum Wage Report

A top researcher has called out University of California, Berkeley for allegedly releasing a biased research paper that served as leverage for the San Francisco minimum wage increase.

Economic expert Michael Saltsman, research director at the Employment Policies Institute, argues that a biased research paper by UC Berkeley helped lead residents of San Francisco to support a rapid minimum wage increase, which possibly contributed to several businesses closing. As Saltsman argues, the wage increase makes the cost of operations a much worse burden for business owners. They often have to cut hours or even in some instances completely close their business.

The paper, “San Francisco’s Proposed City Minimum Wage Law: A Prospective Impact Study,” was released in August, and argued that an increase of the minimum wage will have a vastly positive impact for workers in the city.

“Drawing on a variety of government data sources, we estimate that 140,000 workers would benefit from the proposed minimum wage law, with the average worker earning an additional $2,800 a year (once the law is fully implemented),” the study noted. “Our analysis of the existing economic research literature suggests that businesses will adjust to modest increases in operating costs mainly through reduced employee turnover costs, improved work performance, and a small, one-time increase in restaurant prices.”

The following November, residents of the city voted to increase the minimum wage gradually to $15 an hour over the course of three years. Saltsman argued the UC Berkeley study used biased findings.

“These are the comforting studies they can turn to,” Saltsman told The Daily Caller News Foundation. “It creates stories that say you can raise the minimum wage without consequences.”

“If you look at the methodology,” Saltsman said. “Basically they didn’t take into account the fact it could have a negative impact on employment.”

Saltsman argued that the study only looked at how the wage increase will benefit workers, as opposed to how it may negatively impact businesses. If a business owner is unable to hire as many employees or has to close their business because of the higher cost of operations, it becomes bad for workers, too.

“These contribute to the public policy debate,” Saltsman continued. “It’s become a key position in the public policy debate.”

Saltsman said their approach and the results of the study are not at all surprising. Some of the researchers involved had activist backgrounds.

“The problem at UC Berkeley is they are presenting themselves as unbiased economists,” Saltsman notes. “This is the sort of thing you expect from an advocacy group.”

Michael Reich, one of the researchers involved in the report, shot back at the claims the study was biased.

“In restaurants and retail, stores both open and close all the time. You’d need to know whether closings increased and openings decreased relative to a control group,” Reich told TheDCNF. “That’s an objective method that all economists, including me, use to identify the causal effects of a policy.”

Though the wage increase has not gone into full effect yet, opponents are already pointing to several businesses that have closed. These include Borderlands bookstore, Abbot’s Cellar, Luna Park and Source.

Follow Connor on Twitter

Originally published by the Daily Caller News Foundation.