The new year brings some questionable policy changes to Californians, most notably to the medium- and low-income families in every community.
First is the new minimum wage law that applies to national fast-food businesses. CalMatters reports that “California-based fast-food workers for chains with 60 or more locations around the nation will earn at least $20 an hour beginning in April, $4 higher than the overall state minimum wage of $16 that will be effective Jan. 1. Other employers might have to raise their pay floor to recruit and retain staff.”
The immediate impact was explained by CalMatters: “Economist Christopher Thornberg, one of the founding partners of Beacon Economics, said that in a competitive market, increasing minimum wages for the lowest-paid workers will lead to higher prices for consumers. For example, McDonald’s and Chipotle executives have said they plan to raise prices next year to offset increased labor costs.”
This is one fact of economic life that politicians have never understood—each time you mandate increases in the minimum wage, prices go up across all business sectors, and the very people they are trying to help wind up getting less for every dollar spent.
The greatest impact is on medium- and low-income families in every community. Why? Because they see no net gain, and in most cases a loss in their disposable income.
I began working in 1961 when the minimum wage was less than a $1 an hour, when wages were increased to $1.25 so did the cost of a hamburger, fries, and a shake. In the military, when we got an increase in pay, everything in the commissary (food store) or base exchange (retail store) and our housing costs went up too; that fact of life didn’t change when I worked in the private sector.
Next was a California Air Resources Board (CARB) mandate to require that all new commercial trucks registered in California must be electric; CalMatters reports that “the rules will dramatically change the commercial trucks that are driven on California’s roads, affecting about 1.8 million trucks, including ones operated by the U.S. Postal Service, FedEx, UPS, and Amazon. Trucking companies say electric models are more than twice the cost of diesel trucks, take hours to charge, can’t travel the range that many companies need to transport cargo, and lack a sufficient statewide network of charging stations.”
They also weigh more, because of the battery, so they can haul less freight per trip. And the range of these vehicles is substantially less than diesel powered vehicles, so it takes longer to get the freight from place to place.
But wait! CARB has temporarily stopped implementing the mandate because they didn’t get permission from the Environmental Protection Agency. Freight Waves, a trucking industry website, reported that Steven Cliff, executive officer of CARB, wrote: “CARB will not take enforcement action as to the high-priority or drayage fleet reporting provisions or registration prohibitions until EPA grants a waiver applicable to those regulatory provisions or determines a waiver is not necessary.”
When this and other EV mandates are finally implemented, they would also present an interesting problem for local utilities. The electrical distribution systems in many towns like Lompoc are not currently capable of supporting a sizeable increase in electricity usage by EV charging stations. For example, the U.S. Postal Service fleet would require several recharging stations, all operating at the same time to prepare vehicles for the next day’s deliveries.
The distribution and supply systems will require major modifications to accommodate this and other EV mandates that will soon follow. And large trucks don’t fit in most recharging stations.
Who will pay for this? You will because your electric rates will increase to provide needed funding for infrastructure improvements, and what you pay for postage, shipping, and retail purchases will also go up as retailers pass along the increased costs of drayage [trucking] fees and overtime costs while the vehicles are charging.
Lastly, the California Legislative Analyst’s Office, a nonpartisan government fiscal and policy group, reports “under the state’s current law and policy, we estimate the Legislature will need to solve a budget problem of $68 billion in the upcoming budget process.” In other words, they don’t have enough money to pay for their wish list.
So, what does Gov. Gavin Newsom do? He signs into law free medical care for all “undocumented aliens.” CalMatters estimates that it will cost taxpayers “more than $835 million in the next six months and $2.6 billion every year thereafter.” These folks won’t be paying anything for this care as those of us who are here legally and have a job or are retired and receive Social Security benefits do; all they must do is fill out some paperwork and walk out the door.
Sometimes I wish that misguided politicians would stop trying the “help us” because it just gets worse the harder they try.
Ron Fink writes to the Sun from Lompoc. Send a letter for publication to letters@santamariasun.com.
This article appears in Jan 11-21, 2024.