A minimum wage hike for healthcare workers in California was supposed to take effect this Saturday. But over the past week, Gov. Gavin Newsom (D-CA) and his Democratic allies have worked feverishly on legislation to postpone it.
California Democrats haven’t suddenly become free-market acolytes. They’re worried that the wage increase, which may cost the state $4 billion this year, will sap the Golden State’s budget and force the government to make cuts elsewhere. They hope delaying the new minimum wage until July 1 will buy time for a more permanent solution.
They’d do better to nix the minimum wage hike altogether. It will almost certainly raise prices for insurers and patients and lengthen wait times for care.
The Golden State already has a $16 statewide minimum wage, among the nation’s highest. SB 525, which Newsom signed into law last year, sets a wage floor for healthcare workers of between $18 and $23 an hour this year. By 2028, most healthcare employees, including laundry and food service workers, will need to be paid at least $25 an hour.
State healthcare providers and Medi-Cal, California’s version of the jointly funded federal-state Medicaid program, would have to cover much of the increase. Where they will find the money is unclear. The Newsom administration is grappling with a budget deficit for next year of roughly $45 billion.
Patients can expect to pay more for care, too. Consider what’s happened in the fast food sector, which is digesting a $20-an-hour minimum wage requirement that took effect April 1. Prices at McDonald’s, Chipotle, and Chick-fil-A have already ticked upward. Some restaurants are investing in self-checkout machines and kitchen robots to avoid paying inflated wages.
Higher minimum wages also reduce the number of hours for which employers are willing to pay. The Wall Street Journal reported this week that average weekly earnings among workers in California’s leisure and hospitality sector dropped 2.6% in the last year “owing to a steep drop in hours worked.” Average weekly earnings for their peers in Florida and Texas, which have lower minimum wages, increased 3.2% and 5.2%, respectively.
Hiking the minimum wage for healthcare workers is not cost-free. Patients will pay more for care and will wait longer for it. Workers, especially those at the bottom of the pay scale, will find there’s less demand for their labor.
Other states considering minimum wage increases of their own should take note of the problems California’s is causing.
Click to read the full article in the Washington Examiner.
California rues healthcare minimum wage increase
Sally C. Pipes
Hiking the minimum wage for healthcare workers is not cost-free. Patients will pay more for care and will wait longer for it. Workers, especially those at the bottom of the pay scale, will find there’s less demand for their labor.
A minimum wage hike for healthcare workers in California was supposed to take effect this Saturday. But over the past week, Gov. Gavin Newsom (D-CA) and his Democratic allies have worked feverishly on legislation to postpone it.
California Democrats haven’t suddenly become free-market acolytes. They’re worried that the wage increase, which may cost the state $4 billion this year, will sap the Golden State’s budget and force the government to make cuts elsewhere. They hope delaying the new minimum wage until July 1 will buy time for a more permanent solution.
They’d do better to nix the minimum wage hike altogether. It will almost certainly raise prices for insurers and patients and lengthen wait times for care.
The Golden State already has a $16 statewide minimum wage, among the nation’s highest. SB 525, which Newsom signed into law last year, sets a wage floor for healthcare workers of between $18 and $23 an hour this year. By 2028, most healthcare employees, including laundry and food service workers, will need to be paid at least $25 an hour.
State healthcare providers and Medi-Cal, California’s version of the jointly funded federal-state Medicaid program, would have to cover much of the increase. Where they will find the money is unclear. The Newsom administration is grappling with a budget deficit for next year of roughly $45 billion.
Patients can expect to pay more for care, too. Consider what’s happened in the fast food sector, which is digesting a $20-an-hour minimum wage requirement that took effect April 1. Prices at McDonald’s, Chipotle, and Chick-fil-A have already ticked upward. Some restaurants are investing in self-checkout machines and kitchen robots to avoid paying inflated wages.
Higher minimum wages also reduce the number of hours for which employers are willing to pay. The Wall Street Journal reported this week that average weekly earnings among workers in California’s leisure and hospitality sector dropped 2.6% in the last year “owing to a steep drop in hours worked.” Average weekly earnings for their peers in Florida and Texas, which have lower minimum wages, increased 3.2% and 5.2%, respectively.
Hiking the minimum wage for healthcare workers is not cost-free. Patients will pay more for care and will wait longer for it. Workers, especially those at the bottom of the pay scale, will find there’s less demand for their labor.
Other states considering minimum wage increases of their own should take note of the problems California’s is causing.
Click to read the full article in the Washington Examiner.
Nothing contained in this blog is to be construed as necessarily reflecting the views of the Pacific Research Institute or as an attempt to thwart or aid the passage of any legislation.