Local politicians are feverishly busy spending their imaginary spoils as if the California economy has fully recovered and prosperity has once again returned. Mayor Eric Garcetti’s recent proposal of a massive minimum-wage increase and the state passing legislation that mandates three paid sick days per year for all employees awaiting the governor’s signature will be a rude awakening for Californians.
Mandating increased wages and paid sick days further illustrates the disconnect between our current politicians and business leaders; the majority of business leaders vehemently opposes both pieces of legislation. Unfortunately, it appears that our politicians once again have put their own self-interests ahead of what’s best for the state and ultimately for all of its residents.
By proposing a massive minimum-wage increase, Garcetti is playing to his base and appealing to the masses so he can cement his place in politics. There has not been any viable study completed that has found that arbitrary increases to minimum wage have helped the economy and the creation of jobs anywhere in the world. In fact, the exact opposite is true. As you increase the minimum wage, fewer jobs are available for those who are most in need of them. Employers will be forced to scale back their existing workforce, put aside expansion plans and, worst of all, consider leaving the state all together.
While on its face this might appear the “right thing to do,” in reality, it’s hurting those that it is meant to help, who oftentimes don’t have all the facts and are not educated enough on this issue to realize the true damage that it will cause. With the current shortage of highly skilled labor in the workforce, Garcetti should focus his efforts on training and education programs, and, more importantly, reforming our moribund school system to make us more competitive in the coming decades for much higher-paying jobs that all Californians can enjoy and benefit from.
While the Los Angeles Unified School District has some very talented teachers and administrators, the cost to educate our kids ranks at the top of the scale and the results are nowhere near the top. In fact, the district needs to be completely revamped. Charter schools are popping up everywhere and the results thus far are outstanding. Mandated minimum wage is not the driver for growth, innovation is. Innovation comes from education and opportunity. Mandating a raise in minimum wages on such an aggressive basis does nothing but dampen innovation and growth as companies are forced to deal with more government involvement and meddling.
To serve the people is the only reason why anyone should enter politics and every decision should be in line with this philosophy. Garcetti should think again about why he has entered the political arena and do the right thing for all Californians not just the voters that he is courting.
P. Jacob Yadegar is the founder and chief executive of Empyrean Funding of Los Angeles, which specializes in residential and commercial loans. He also is chairman of the Los Angeles chapter of Gen-Next, a non-profit dedicated to finding solutions to challenges.
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