Why don’t members of our business community understand simple macroeconomics? Why are they the first to justify outrageous salaries for CEOs and the first to oppose an increase in the minimum wage? Measure D will enhance our local recovery and provide needed resources to people who need it. It’s the morally right thing to do.
The data is in, folks: Lifting the minimum wage reduces worker turnover, boosts worker efforts and spurs consumer demand, according to William Lester, author of a April 2011 study in the journal Industrial. Lester asserts that business leaders in other countries—including the UK, Canada, Australia and France—recognize the economic benefits of a higher minimum wage. It also shows there is no negative impact to employment or economic growth. None. Other studies confirm those findings.
So why the unnecessary hyperbole by the San Jose Silicon Valley Chamber of Commerce? It is especially galling for them to say in their ballot argument that an increase in the minimum wage will cause Goodwill Industries to cut 100 job-training positions. Really? Goodwill is a $3.03 billion nonprofit company. In 2004, the Goodwill CEO in Oregon was forced to reduce his salary from $831,508 to $634,477 after an 18-month investigation. Today, that salary is again over $700,000.
Other executives of the organization nationwide routinely make mid six-figure salaries. The total cost of a $2 raise for 100 workers at 40 hours per week, with 52 weeks in the year, is $416,000 a year. Heck, Goodwill might be able to get half a CEO for that price.
For an organization that portrays itself as helping the poor, opposing the minimum wage for their workers is unconscionable. It is morally reprehensible.
But the business community is quick to defend the six-figure salaries based on a non-existent competition argument. We just don’t know how difficult it is to fill those positions if they paid $250,000 instead of $700,000. Goodwill might have to settle for a San Jose City Manager Debra Figone or some other incompetent CEO type currently making six figures.
The specious argument that it will hurt San Jose competitively is ridiculous. People don’t drive to Santa Clara or Cupertino because the dollar menu went up a quarter at the local burger joint. More importantly, you will have more people buying that burger, because they can afford it.
Maybe we should send our business community leaders to an Economics 101 class at San Jose State University. The students at that stellar institution of higher learning, who put Measure D on the ballot, obviously know something our current local business leaders do not. Clinton called it “arithmetic,” but really it’s common sense.
Rich Robinson is a political consultant in Silicon Valley.