LABOR AND ECONOMIC POLITICS-If you’ve been paying attention to the news in California at all for the last year or so, you could be forgiven for mistaking the left wing of the California Democratic Party as a pro-labor institution.
In the summer of 2015, the City of Los Angeles passed a groundbreaking phased $15 minimum wage, to be implemented by 2020. As the most recent legislative session closed, a whole raft of workplace protection legislation was passed. And most recently and memorably, Governor Jerry Brown signed landmark farmworker overtime protections into law, correcting the eight-decade-old exclusion of farmworkers from standards enjoyed by industrial and white-collar laborers.
All of these initiatives have been spearheaded by California Democrats, against heavy opposition by Republicans and their big and small business backers. All this is exemplary of what might be termed the “wage strategy,” the effort to reduce poverty and inequality by artificially raising the wages of California’s poorest and most vulnerable laborers.
Business interests deride the wage strategy for slowing job growth, arguing that it increases costs for both small and large businesses. This critique has merit, but the unspoken reality behind it is that if labor acts as a free and fluid market where employers can adjust costs solely based on market forces, rather than a protected or unionized force unto its own, there is nothing guaranteeing a basic standard of living and pay for workers, who are not mere economic forces but living, breathing human beings with needs and passions of their own.
So the wage strategy of artificially inflating workers’ wages and adding worker protections, while harmful to businesses, is conducive to income stability if properly executed.
We could argue until the cows come home as to whether or not a $15 minimum wage in Los Angeles or an 8-hour workday in the Central Valley is the best way of doing that, or whether market-based measures like the Earned-Income Tax Credit and agricultural sector-specific labor policies would be better alternatives. But sometimes in legislation, establishing the principle is more important than perfecting the administration of policy; and as of September 2016, the principle that the state of California ought to guarantee laborers a decent wage has generally been secured.
But that is not enough, and indeed, that can be harmful in the long run if pursued on its own, without addressing other economic factors. The most pressing of these other factors is the skyscraping California cost of living, in all its forms -- high energy prices, high housing prices, high costs of doing business, and the rest.
The California Democratic Party, while adamantly pursuing the wage strategy, has done nothing to pursue a “cost strategy” of reducing the cost of living across the board. Absent a cost strategy that makes business and overall living easier in the state, pursuing a wage strategy alone is tantamount to progressive self-congratulatory backscratching.
Democratic elites can make themselves feel like they’re doing good for the working class, without doing anything significant to reduce the cost of living for the working class, and let workers keep more money in their pockets. Pursuing one strategy is not enough -- both must be pursued in tandem, or the state risks becoming either a low-job wasteland or a low-wage serfdom.
But not only have left-leaning Democrats failed to pursue the cost strategy -- they have in many cases impeded and even reversed its advancement by Mod Caucus Democrats. Shortly after farmworker protection measures were passed, other measures were instated to divert more water to fish, and thus away from farms.
Generally agricultural interests -- both management and labor -- are better off and more productive with more water flowing to the farms, and diverting water for conservation purposes raises the cost of doing agricultural business and productivity, thus making life harder for farmers and their employees.
This glaring hypocrisy -- raising farmworkers’ wages while increasing their cost of doing business -- is a drop in the bucket compared to other Golden State cost-of-living stories.
One particularly egregious example is the Brown regime’s relentless pursuit of climate legislation to increase the percentage of energy California derives from green, renewable, unreliable sources like wind and solar. This emphasis on low-productivity fuel-less energy sources, coupled with the planned closure of reliable energy producers like the Diablo Canyon nuclear power plant, only raises the cost of electricity for every Californian, impacting the poor and working classes the most.
Democratic proposals to increase the gas tax to pay for much-needed road infrastructure, rather than repurposing transit funds to repave the roads, has a similar impact on transportation costs for drivers -- who disproportionately come from lower-income backgrounds.
Another beast the California Democratic elite refuses to tackle is the cost of land and housing, which is largely buttressed by abuses of the California Environmental Quality Act (CEQA) and general NIMBYism on the part of wealthy coastal homeowners who like seeing their homes increase in value, at the expense of less well-off newcomers.
Study after study across the board suggests that the best solution to the price of housing is not rent control, but increasing supply -- building more houses to lower prices for more people. But draconian regulations and NIMBY activism preclude this from becoming reality, and as such, the people of California remain hitched to high housing costs.
Thus, regardless of the increases in real income for workers that the California Democrats have been advocating, the California working class will continue to labor under relatively low profits simply due to the high cost of living and doing business which is buttressed by California’s high costs of housing and energy, which are largely influenced by its regulatory code.
Elite coastal Democrats can congratulate themselves all they want for being a “party of the people” and “supporting workers;” but it certainly is a uniquely Californian way of supporting workers, barely increasing their pay without decreasing their costs. Then again, the Golden State has never been known for its consistency.
(Luke Phillips is a political activist and writer in California state politics. His work has been published in a variety of publications, including CityWatch, Fox&Hounds, NewGeography, and The American Interest. He is a Research Assistant to Joel Kotkin at the Center for Opportunity Urbanism.) Prepped for CityWatch by Linda Abrams