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March 27, 2007
Keep It Simple
By Carleen Beste
2006
Chair of the Board
 The
Redondo Beach Chamber will consider supporting legislation
aimed at making workplace posters easier to understand. AB
613 will establish a working group of employee and employer
representatives to ensure current state-mandated workplace
posters use simple, plain language. The Chamber supported
the same bill last year, which died in committee.
Why is this bill
so important to the Chamber? The answer is simple - both
employees and employers will benefit from easy-to-understand
workplace posters.
The new postings
would use common, everyday words and definitions and short
sentences. Using plain, simple language in workplace
postings ensures that employers know how to comply with the
law and that workers can understand their rights.
Hopefully, the clearly written notices will prevent
frustration and litigation and, in the process, workers,
employers and government will save time, effort and money.
AB 613 proposes
to assemble a working group composed of equal numbers of
employer and employee representatives, overseen by the
Division of Labor Standards Enforcement. Using existing
resources, the group members will work together to make
recommendations on how best to simplify the language of
current state-mandated workplace posters.
Simplicity has
its benefits.
September 29,
2006
Governor Signs Law Raising
the Minimum Wage Without Damaging Automatic Increases
The Governor stopped the legislature from tying future
minimum wage increases to increases in inflation. The
Redondo Beach Chamber opposes automatic increases to the
minimum wage because it does not take into consideration the
state of our local economy or the vitality of our local and
regional business community at the time the automatic
increase is initiated.
The Governor signed the Redondo Beach Chamber-opposed Senate
Bill 1835, making the California minimum wage one of the
highest in the country. The hourly minimum will go to $7.50
effective January 1, 2007, and there will be corresponding
increases in the minimum salary that must be paid to exempt
employees. These changes will require new state minimum wage
posters and revisions to the wage orders that must be posted
by California employers. The second increase contained in
the bill will take the minimum to $8.00 per hour in 2008 and
again impact exempt minimum salaries.
“We remain opposed to minimum wage increases,” stated Marna
Smeltzer, Redondo Beach Chamber President and CEO. “Minimum
wage increases translate into substantial increases in
employer costs. Therefore, drastically impacting employers
ability to create new jobs. Not only would direct payroll
costs be increased, but workers' compensation, unemployment
insurance, pensions and a multitude of other costs also
would go up substantially,” Smeltzer continued.
The Redondo Beach Chamber believes that a minimum wage
increase increases the price of products and services. Thin
margins that are common in the food services industry do not
allow for sharp increases in labor costs. Price increases
are definitely on the list of corrective actions restaurants
have to combat this sort of arbitrary increases in costs,
but more potent is laying off workers.
Raising the minimum wage hurts low-skilled workers in two
ways. First, there are fewer jobs available. Second, with a
larger pool of applicants, competition is stiffer.
Low-skilled workers have a more difficult time getting those
job skills that are crucial to economic well being.
Another side effect of raising the minimum wage is that it
increases the number of high-school students who drop out.
Some of these students do not find employment. Another group
of students are part of those applicants that compete jobs
away from welfare recipients. Dropping out of school is very
destructive. High school dropouts have a very difficult time
improving their well being.
The campaign to raise the minimum wage has little positive
impact on the lives of poor people. Rather, it is a
political measure that plays to a misunderstanding of the
impact of higher minimum wages. The future of the American
economy depends on a correct understanding of the causes of
prosperity.
For too long, attempts to relieve poverty have been
misguided. To lift people out of poverty, we need a system
that maximizes opportunities for economic well-being of
low-skilled workers.
September 1,
2006
Minimum Wage Watch
This potential inflationary effort to raise the minimum wage
in the state is dormant, but under extreme scrutiny by the
thirteen-member Wage Board appointed by the Industrial
Welfare Commission (IWC). As of August 4, 2006 the board
failed to agree on a recommendation regarding the state
minimum wage. The issue of indexing is also up in the air.
Deliberations will be reported at the IWC meeting August 24,
2006.
Two legislative proposals to raise the minimum wage and
automatically index future increases passed policy
committees in both houses of the Legislature on June 21,
2006. AB 1835 and SB 1162 would increase the minimum wage to
$7.25 on July 1, 2007 and to $7.75 on July 1, 2008, with
annual indexing raising the minimum wage every year
thereafter.
Senator Don Perata, the democratic leader of the California
State Senate has proposed dropping the indexing idea if the
Governor would support a $1.50 increase. The proposal from
the Governor has been in the $1.00 range with no indexing.
The Governor has previously vetoed minimum wage legislation
that included indexing. The Perata proposal came on the same
day the U.S. Senate rejected an increase in the federal
minimum wage. The proposal would have resulted in an
increase of the current $5.15 federal minimum by $2.10 over
three years. Senate Democrats rejected the
Republican-proposed increase because it was tied to federal
estate tax relief for large estates increase in the state
minimum wage without indexing, which is being considered by
the IWC.
So there you have it. The state and even the federal
government is locked in a battle about how to increase the
minimum wage and by how much. Nobody wants to discuss the
1000 pound elephant in the room that is there should be no
minimum wage, even though most economists agree that a
minimum wage in a economic driven country like the Unites
States should not have a minimum wage.
We expect extreme pressure from all sides to resolve a
minimum wage increase. Your Chamber’s staff will be watching
and reporting developments if they occur. The employers of
California will need to work hard to defeat this idea, At
the Chamber our Government Advocacy Committee will keep a
watchful eye on developments and continue applying pressure
through written communication with state legislators and the
Governor’s office.
July 14, 2006
Minimum Wage Hits Food Services Hardest
A USDA economic research study confirmed that eating and
drinking places have a larger share of minimum wage workers
than other sectors. Also confirmed is that the labor costs
are high in these businesses (34 cents of each dollar taken
in).
These statistics should be in every Redondo Beach business
community’s mind when we consider the potentially damaging
effect that can come from AB 1835 and SB 1162 that are
currently under legislative consideration.
Do not let the arguments that a minimum wage increase does
not increase the price of products and services in these
deeply affected industries. Thin margins that are common in
these industries do not allow for sharp increases in labor
costs. Price increases are definitely on the list of
corrective actions restaurants have to combat this sort of
arbitrary increases in costs, but more potent is laying off
workers.
The most damaging effects of raising the minimum wage are
side effects that have everything to do about employment,
not price increases. It has been well documented that the
minimum wage destroys jobs, particularly the jobs of
low-skilled, young workers. However, there are other equally
pernicious side effects of higher minimum wages. Higher
minimum wages make it more difficult for people to leave
welfare and induce high-school students to drop out.
Another argument is that minimum wage increases help the
family wage earners. A Joint Economic Committee Report out
of the US Congress cited that only 1.2 percent of all
minimum wage workers were adult heads of households with
incomes less than $10,000. Conversely, fifty-seven percent
of minimum wage workers are single individuals, many living
with their parents. Minimum wage workers are not parents
struggling to feed their children. Rather they are high
school or college students living at home. Also, the level
of the minimum wage is irrelevant for most people in
poverty. Only 9.2 percent of poor people of working age have
full-time jobs.
Raising the minimum wage hurts low-skilled workers in two
ways. First, there are fewer jobs available. Second, with a
larger pool of applicants, competition is stiffer.
Low-skilled workers have a more difficult time getting those
job skills that are crucial to economic well being.
Another side effect of raising the minimum wage is that it
increases the number of high-school students who drop out.
Some of these students do not find employment. Another group
of students are part of those applicants that compete jobs
away from welfare recipients. Dropping out of school is very
destructive. High school dropouts have a very difficult time
improving their well-being.
The campaign to raise the minimum wage has little positive
impact on the lives of poor people. Rather, it is a
political measure that plays to a misunderstanding of the
impact of higher minimum wages. The future of the American
economy depends on a correct understanding of the causes of
prosperity.
For too long, attempts to relieve poverty have been
misguided. To lift people out of poverty, we need a system
that maximizes opportunities for economic well-being of
low-skilled workers. Increasing the minimum wage is a
wrong-headed solution that will deprive young, poor
Americans of an opportunity to improve their economic
situation. That’s why we oppose AB 1835 and SB 1162.
March 30, 2006
Governor Calling on Legislature and
Business Community to Embrace a Minimum Wage Increase
Governor Schwarzenegger is calling on the Legislature and the business
community to embrace his plan to increase the minimum wage. According to the
Governor, increasing the state’s minimum wage by $1.00 could boost the
paychecks of 2 million of California’s lowest wage earners by more than $2
billion. Senate Bill 1167 would raise California's current minimum wage of
$6.75 to $7.25 in 2006 and to $7.75 in 2007.
Last year the Governor announced that California’s improving economy was
stable enough to support an increase in the minimum wage and welcomed the
opportunity to raise it.
The Redondo Beach Chamber has historically opposed minimum wage increases.
We look forward to reviewing SB 1167 and taking a position. The Redondo
Beach Chamber’s long standing policy opposing minimum wage increases is no
secret. We concur with most chambers of commerce, including the California
Chamber of Commerce that minimum wage increases above the federal minimums
present competitiveness issues for businesses in Redondo Beach and
throughout California.
Furthermore, employers who can afford to pay more than the minimum wage
currently do. Small businesses that can not afford to pay more than the
minimum wage would need some changes in the law that would reduce their
costs. Convincing the legislature to approve more flexible overtime rules is
the most common counter position of this Chamber when we oppose proposed
minimum wage increases.
The Redondo Beach Chamber will keep its members informed on this issue over
the coming months.
Click here
to contact the Redondo Beach Chamber
for more
information
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