An introductory lesson in microeconomics is enough to inform a student that minimum wage hikes are typically a bad proposition.
Sunday, July 2, 2023
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Economics Minimum Wage California Los Angeles Wages Price Controls Labor Market
The city of Los Angeles is expected to hit a boom of tourism in the upcoming years. Two major worldwide sporting events: the FIFA World Cup and the Olympics are set to visit the city in 2026 and 2028, respectively. The influx of tourism to the city will undoubtedly serve as a major revenue source for businesses throughout the region. In anticipation of the forthcoming boom, some officials in the region and also the state of California are proposing an increase in the minimum wage.
As of January 1, 2023, the statewide minimum wage is $15.50 an hour, with several counties approaching $18 an hour. Los Angeles city council member Curren Price has proposed a plan to drive the minimum wage up to $25 an hour, with the overall goal to increase it by a dollar each year until 2028, making the minimum wage $30 an hour. While this was originally aimed at local hotel and airport employees, some politicians are pushing for an increase in all retail sectors, including tourism.
An introductory lesson in microeconomics is enough to inform a student that minimum wage hikes are typically a bad proposition. To non-economists, increases in the minimum wage mean alleviating poverty and protection from greedy employers.
But it’s not that simple.
The...
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