Proposition 210 and Unemployment

Re “Voters to Decide on Minimum Wage Hike,” Sept. 29:

Your report on Proposition 210 misleads voters. First, the report states that Nobel laureate economists differ on the effects that minimum wage hikes have on the economy. True enough, but it is also true that a survey of the American Economics Assn. revealed that over 90% of respondents believed that a minimum wage increases unemployment. There is no issue that has been subject to more empirical scrutiny than the minimum wage. While there are rare and controversial exceptions, almost all studies have concluded that minimum wage hikes lead to job losses.

Second, the anecdotes about low-wage workers being raised out of poverty do not reflect the actual broad-based impact of minimum wages. Minimum wage workers tend to be young, low-skilled and inexperienced or do not have a high school education. In California, over 56% of minimum wage workers are Hispanic--a fact that is surely tied to immigration. Only 33% of California minimum wage workers are married, and many of them are secondary earners. Nationally, over 35% of minimum wage workers are teenagers. Most minimum wage workers do not come from poor households. Most full-time, year-round workers are not poor--the poverty rate for such workers is less than 1%.

A recent study by myself and a colleague forecasts over 66,000 lost jobs annually in California if the minimum wage is increased to $5.75 an hour. Proposition 210, the Living Wage Act, could more accurately be called the Job Destruction Act.

ERIC SOLBERG

Professor of Economics

Cal State Fullerton