Bad, Worse, Worst: The Misguided Perfectionism of Gavin Newsom
My grandfather used to sing to me, “Good, better, best / never let them rest / till the good is better / and the better is best.” I appreciated that lesson and have been applying it to try to make sense of a recent bill signed by California governor Gavin Newsom. While the bill may be the result of Newsom’s grandfather singing to him about “bad, worse, and worst,” I have determined it is more likely a case of bad/worse/worst economic thinking. It exposes a level of bad that most economic teachers likely never bother to discuss.
AB 1228 is an unusually precise and dramatic bill related to the minimum wage. Currently, the minimum wage in California is $15.50 per hour. This bill raises the minimum wage to twenty dollars per hour for employees who specifically work in fast-food restaurants that have over sixty stores nationwide. This will be a nearly 30 percent increase in labor prices for the “big chains.”
The sponsor of the bill, Assembly member Chris Holden, boasts that it is “the most impactful fast food wage law that this country has ever seen.” I suspect he will be proven right. However, he and the governor get the impact all wrong. They point to a half million fast-food workers who will positively feel this impact. In truth, all 39.3 million Californians will feel it. Life as they know it is about to change.
The First Two Levels of Bad
In case Governor Newsom’s smile tricked you into a state of warm fuzziness, this bill is bad, worse, and worse. The bad occurs on the demand side of the labor market. The bad is the textbook story. Employers (i.e., demanders of labor) now face a higher price for humans in their production process. To try to keep a check on burger and taco prices, they will seek out alternative production approaches. The predictable solutions include the intensification and replacement of human roles. The only question—an empirical one—is how harassed and how obsolescent humans will be. Still, it is safe to say that the minimum wage has long been machine’s best friend.
The worse occurs on the supply side. The worse requires some guts (and a supportive human resources department) to discuss. Higher wages always attract more and better-skilled applicants. The skills needed for work in the fast-food industry foremost include discipline, respect, confidence, punctuality, efficiency, humility, and cooperation. One can gain these importan
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