Minimum-Wage Increase
On California’s new minimum wage, Richard Rothstein’s article (Op-Ed, Dec. 23) is right on the mark, but he understates the cost of renting an apartment in this area. He states that $4.25 an hour will produce $735 a month at steady employment, but after Social Security tax, which everyone pays, it is only $680. If half is going for rent, that will allow about $340, which will about pay for renting one furnished room. That’s OK for a single person, but if one is married with small children, what then?
People say that if they raise the minimum wage, I’ll have to pay more for a hamburger at a fast-food stand. Well, maybe I should be paying more. Is my right to eat cheap hamburgers superior to the right of the hamburger server to have a living wage? If the hamburger server were only paid $1 an hour, I could have even cheaper hamburgers, or it would be even better if they worked for nothing. Obviously, there has to be a balance in the pricing of commodities where the needs of both the producer and consumer are being reasonably met, but even as Adam Smith has said, the wages of labor have to be sufficient to sustain that labor in order for it to reproduce and replace itself. In a city where cheap rents in poor areas are $400 or more a month, $4.25 is hardly even a sustaining wage.
The restaurant operators complain that they will no longer be competitive if they have to pay a higher minimum wage, but if they are all required to pay the same minimum, then how are they not competitive?
As for manufacturers who are in competition with other areas and other countries, the real overhead item that must be factored into wages that make Los Angeles less competitive are the rents that have risen 50% faster than the general cost of living in the past decade despite rent control and the reductions in rent that Proposition 13 was supposed to bring about.
Rent control has no meaning for a person seeking an apartment because new renters aren’t covered by it. The other high overhead item that must be factored into wages is the cost of transportation, which is mostly by private auto. In a city where people drive 20 and 30 miles to work, wages have to be higher to pay for this overhead cost than in a city in which they drive 10 or 20 miles or in a city with adequate public transportation. There’s the real disadvantage to the local manufacturer who is competing against goods produced elsewhere, the cost of rent and transportation. And, as the oil scarcity again emerges in the next decade, this advantage will be even more pronounced.
The fact is that the minimum wage is only a minor consideration in the costs of doing business in Los Angeles. The big overhead items that business must pay are for high rents and transportation costs built into the Los Angeles economy.
ROBERT C. MASON
Simi Valley
