Hemorrhaging Skilled Medical Professionals, Cali Delays $25/Hour Min. Wage Mandate

P. Gardner Goldsmith | June 4, 2024
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MRCTV last week reported on California-based Kaiser Permanente’s desperate request for doctors to return after the mega-medical corporation fired them for not taking the mRNA jab. Now, we get to follow-up with another breaking story indicating how desperate California's medical field is for skilled workers, and exposing the fact that, by his own actions, Democrat Governor Gavin Newsom is admitting that minimum wage laws harm economic growth.

On May 31, Newsom signed SB 828, a bill to delay by a month the enforcement of a state wage mandate that will compel healthcare employers (with some variations, based on the size of the healthcare business and the locale it “serves”) to annually raise wages, eventually forcing them to pay $25 per hour by 2028.

As Kelly Gooch, writing for professional journal Becker’s Hospital Review, explained to readers:

“The legislation, SB 828, authored by California Sen. Maria Elena Durazo, postpones the start of the wage adjustments to July 1, the beginning of the state's fiscal year. 

This provides additional time for the governor's administration to continue to work with state lawmakers and stakeholders to tie provisions related to the healthcare worker minimum wage law, SB 525, to state budget conditions, according to CalMatters.”

But why the concern about “state budget conditions”? And what, exactly does SB 525 – now delayed by a month in its implementation – do?

“Mr. Newsom signed SB 525 in October to gradually increase the minimum wage for healthcare workers to $25 per hour, starting June 1. The law calls for annual increases, ranging from $18 to $25 per hour, with healthcare facilities expected to reach a $25 per hour minimum wage by June 1, 2028, or, for some in rural locations, 2033.”

In other words, as the collectivist-envy-based coercion machine of leftist politicians and pop media oft propagandize, the politicians think they can foist their preferences onto market price points for all kinds of services and the products that human labor creates. They want to tell consumers that they must spend more and have less left over to save or spend on other services or products. They want to increase the opportunity costs in the lives of those who employ healthcare workers and who are consumers of medical services – that latter group also known as potential patients, searching for affordable medical care.

And Gooch allows readers to see that Newsom and the backers of this one-month delay tacitly acknowledge why they need to put off by a month the mandate:

“The governor then released a price estimate of $4 billion in the 2024-25 fiscal year alone and indicated he wanted to potentially delay the increases in the face of the state's projected budget shortfall.”

Lesson revealed.

On two levels, Newsom’s move tells us that 1) The state expects a negative impact to tax revenue, resulting from a decrease in healthcare field employment, both as a result of the state mandate “pricing out” numerous workers whose skills will not sufficiently rise to the level of the state-imposed wage, and 2) that the state, itself, often is an employer in numerous government-tied medical facilities, thus revealing a variation of the above economic truism: as an employer, and as it’s own mandate-imposer, the state is raising its own costs, which, again, reveals the economic truism that earlier applied to private employers.

The truism can be stated in simple terms.

It is unethical to tell others how they should, or can, engage in free association and peaceful trade, and such an unethical, aggressive action invariably leads to disastrous economic consequences.

They include higher costs, lower productivity, fewer consumer choices, fewer opportunities to see new fields of endeavor, fewer opportunities for research, development, inventiveness, and new jobs, and lower quality, due to adjustments that employers try to make in order to maintain workforce at the expense of other factors.

Related: NYC Minimum Wage Insanity Yields Job Cuts, Fewer Hours, Harms The Poor | MRCTV

This is the eternal lesson of minimum wage mandates. The unethical compulsion of politicians – who, if they wanted to, could enter the market and offer wages at the levels they think are so wonderful, rather than imposing them on others – always, and axiomatically, is a statutory prison for human choice, for human free will. When that compulsion is directed at market trade, it not only is unethical, it imposes all the economic evil noted above.

As Dr. Mary Ruwart and many others have explained, minimum wage mandates harm the least skilled workers, pricing them out of first-opportunity jobs.

Already in California, this effect has been seen in real time with its “$20-per-hour minimum wage” for large food chains.

And, writing for Reason, John Stossel lays out the inescapable reality in succinct, enumerated, bites:

“No. 1: Thousands of Californians have already lost jobs because some restaurants closed. Others lost income because their employer cut worker hours. The chain El Pollo Loco cut employees' hours by 10 percent.

Pizza Hut announced that they will lay off more than a thousand delivery drivers. One such driver, Michael Ojeda, understandably asked, 'What's the point of a raise if you don't have a job?'

No. 2: Workers who still have jobs will lose them because now their employers have more incentive to automate. Chipotle just created a robot that makes burrito bowls. Even CNN acknowledged, 'Some restaurants are replacing [fast food workers] with kiosks.'

No. 3: Prices go up.”

Absolutely.

“The day Newsom signed the bill, he was asked, ‘Can Californians expect the prices of their McDonald's and Starbucks to go up?’

Newsom deceitfully replied, ‘I've heard that rhetoric before. And it didn't happen!’

Nonsense. It did happen. It always happens when government forces wage increases. In this case, Starbucks prices have increased as much as 15 percent. Customers will pay about $200 per year more for their coffee. A chicken burrito at Chipotle will cost up to 8 percent more.

No. 4: Perhaps the worst unseen harm from minimum wage laws is that young and unskilled people won't even be hired. They won't gain valuable experience from a first job at a fast-food restaurant.”

And now, with this one-month delay in the attempt to widen the government imposition of higher costs on medical-field employers, even Gavin Newsom tacitly admits reality.

But he will not acknowledge this devastating reality. He will march on, smiling, as he and his collectivist coercion force in Sacramento continue to destroy the California economy.

It’s not going to be fun to live in California.

Heck, economically, it’s already a nightmare, and it’s going to get worse.

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