Bad Timing for Prop. 210 : Minimum-wage hike would come too soon after federal increase

The presence of Proposition 210 on the Nov. 5 ballot will give Californians their first opportunity to vote on the minimum wage. But the initiative is flawed and the timing of the vote is problematic, coming so soon after last summer’s passage of a higher federal minimum wage. The Times endorsed raising the federal minimum wage; however, we oppose 210 because it would set an undesirable precedent for establishing pay scales.

The state minimum wage can be changed by federal action or by the state Industrial Welfare Commission, a five-member panel appointed by the governor and confirmed by the state Senate. The commission frequently authorized increases in the minimum wage in the early 1970s and ‘80s, but the last increase--to $4.25--came in 1988. Frustration with the commission’s inaction for eight years led to Proposition 210.

While the California commission was inactive, Washington--finally--took up the slack. In August, Congress approved a two-tier hike in the federal minimum wage, driving the level to $4.75 an hour on Oct. 1, with a second increase, to $5.15, due next September.

Proposition 210 qualified for the November ballot before Congress passed and President Clinton signed the higher federal minimum wage, and if passed by voters it will raise the hourly wage for Californians to $5 next March 1 and then to $5.75 on March 1, 1998. The market, not the ballot box, should dictate the next round of hikes in the minimum wage. They should not be set by popular vote. What would be next? Minimum staffing levels?

The federal increase, together with those proposed in 210, would boost labor costs of minimum-wage workers by a total of 35% over 18 months. That would be a considerable jolt for employers, especially small businesses. Employers would pass along the higher payroll costs to consumers in higher prices perhaps, or they could cut back on work hours or simply let some workers go.

Welfare reform, meanwhile, is expected to drastically reduce California’s benefits for the poor over the next 10 years, and that means it’s important to maintain and create entry-level jobs. A higher minimum wage would be a disincentive so soon after the belated but welcome increase in the federal minimum wage. Vote no on 210.