More minimum wage bullshit

 

Workers unaware that they are soon to be laid off.
Workers unaware that they are soon to be laid off.

Some clever economists have come up with a name for the religious¬† application of simple economic principles to complex situations where they probably don’t apply: Econ-101ism.

That’s immediately what I thought of when my better half told me about this stupid article in Investor’s Business Daily about the minimum wage and UC Berkeley.

See, folks at Berkeley touted the $15/hr minimum wage as a good thing, and then UC laid off a bunch of people. Coincidence? The good people at Irritable Bowel Disease think not!

Except, few at UC gets paid the minimum wage. And the $15/hr minimum wage has not taken effect and won’t take effect for years. And the reason for the job cuts are the highly strained budget situation at the UCs, a problem that is hardly new.

You could make an argument that a $15/hr minimum will strain the economy, resulting in lower tax revenue, resulting in less state money, resulting in layoffs at the UC’s. I guess. Quite a lot of moving parts in that story, though.

Smells like bullshit.

Edit: UCB does have its own minimum wage, higher than the California minimum. It has been $14/hr since 10/2015 and will be $15/hr starting in 2017. (http://www.mercurynews.com/business/ci_28522491/uc-system-will-raise-minimum-wage-15-an)

Another edit: Chancellor Dirks claim the 500 job cuts would save $50M/yr. That implies an average hourly cost of $50/hr. Even if 1/2 that goes to overhead and benefits, those would be $25/hr jobs, not near the minimum. In reality, the jobs probably had a range of salaries, and one can imagine some were near the $15 mark, but it is not possible that all or even most of them were.

 

3 thoughts on “More minimum wage bullshit”

  1. It would be interesting to see when the lowest wage earners at UC Berkeley went from making under $15/hour to making more than that and take a look at whether that was associated with subsequent layoffs.

    1. It turns out that the minimum wage at UCB is higher than the state minimum. It is $14/hr, as described in an SJ Merc article pasted above. I also have a strong suspicion that the jobs cut were not at that wage, but there’s not easy way to find out.

  2. The cuts were supposedly by attrition, so it is people who have worked at UC Berkeley for quite some time. So yes, they probably were not working at $14/hr. I just hope they don’t come for me…

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