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UC Berkeley Touts $15 Minimum Wage Law, Then Fires Hundreds Of Workers

By zzyzzx   2016 May 12, 9:55am   1,043 views   5 comments   watch (0)   quote      

http://www.investors.com/politics/editorials/uc-berkeley-touts-15-minimum-wage-then-fires-hundreds-of-workers-after-it-passes/

UC Berkeley Touts $15 Minimum Wage Law, Then Fires Hundreds Of Workers After It Passes

UC Berkeley announced that it was laying off 500 employees just a week after California Gov. Jerry Brown approved a $15 minimum wage. (AP)

Labor Markets: Hundreds of employees at the University of California at Berkeley are getting schooled in basic economics, as the $15 minimum wage just cost them their jobs. Too bad liberal elites “fighting for $15” don’t get it.

A week after California Gov. Jerry Brown signed the state’s $15 minimum wage boost into law, UC Berkeley Chancellor Nicholas Dirks sent a memo to employees announcing that 500 jobs were getting cut.

Coincidence? Not really.

Last year, University of California President Janet Napolitano announced plans to boost its minimum wage to $15 at the start of next school year, independent of the state law. Since UC Berkeley was already in financial trouble — it ran a $109 million deficit last year and is projecting a deficit of $150 million this year — number crunchers there had to have factored in the higher mandated wage when making their layoff decisions.

Those workers might want to have a chat with the folks at UC Berkeley’s Center for Labor Research, who just days before Brown signed the wage-hike bill released a study touting the minimum wage as a boon to low-income household breadwinners.

After that report came out, Ken Jacobs, chairman of the UC Berkeley center, told the Los Angeles Times, “This is a very big deal for low-wage workers in California, for their families and for their children.”

It is a big deal, as well, to those soon to be out of work UC Berkeley workers.

But why is anyone surprised about jobs cuts following a wage hike? It’s one of the most basic laws of economics. Any high school kid taking Econ 101 can explain it: If you raise the price of something, demand goes down.

Keep in mind, too, that a $15 minimum wage is more than twice the federal minimum wage today. And it would set the wage floor higher than it’s ever been. On an inflation-adjusted basis, the minimum wage peaked in 1968 at just over $10 an hour.

Even the liberal Mother Jones admits that a $15 minimum is “terra incognita” and “might not be entirely benign.”

What’s surprising, then, is that unions, liberals and others pushing the minimum wage hike have managed to convince the public that this law somehow doesn’t apply to the labor market, and so succeeded in getting $15 laws in California, New York and Seattle. You can bet that either Bernie Sanders or Hillary Clinton will push $15 at the national level if either is elected.

Berkeley employees whose jobs are on the chopping block might want to educate these leaders about the perils of this idea.

#economics #minimumwage #obamasucks

Comments 1-5 of 5     Last »

1   Strategist   2016 May 12, 10:18am     ↑ like (1)   ↓ dislike   quote    

zzyzzx says

UC Berkeley Touts $15 Minimum Wage Law, Then Fires Hundreds Of Workers

Most of the 500 who got laid off probably support $15.00 minimum wages. I wonder if they support it now?

2   komputodo   2016 May 12, 10:30am     ↑ like   ↓ dislike   quote    

it's not fair

3   Blurtman   2016 May 12, 10:30am     ↑ like (1)   ↓ dislike   quote    

zzyzzx says

But why is anyone surprised about jobs cuts following a wage hike? It’s one of the most basic laws of economics. Any high school kid taking Econ 101 can explain it: If you raise the price of something, demand goes down.

Output will go down as well.

4   TwoScoopsMcGee   2016 May 12, 10:46am     ↑ like (2)   ↓ dislike   quote    

UCal Berkeley has a budget problem and this was in response to a report that was written before the $15/hr minimum wage; has nothing to do with the minimum wage which is being phased in over years.

Additionally, it will mostly be done by attrition, not by layoffs - they simply won't replace people who leave.

And finally, no information on what positions are being cut. I suspect it's more "Assistant to the Vice Associate Dean of Diversity" who makes $80,000/yr already.

Not Janice the Janitor.

5   hc167   2016 May 12, 12:15pm     ↑ like (1)   ↓ dislike   quote    

I love UC Berkeley, I used to work in Berkeley Lab. Too bad, the $15 Minimum Wage Law is too little, we should have $25, or even $35 minimum wage, so more lay off happen and people will work harder to keep their job. This is what we need since people cannot learn a lesson in a good way, then a painful lesson is needed. Something sound good doesn't mean they are good.
In my view, the best kind of job in the next 20-30 years will be still in the technology area. we can see that software engineer make a lot of money in bay area without any minimum wage law. The is simply the natural law of free market. We will have free market in the technology area simply because technology keep changing and changing so fast that the government is having a hard time creating a new regulation to regulate the technology industry. By the time they passed the regulation, the technology may have already obsoleted and they have to figure out a new regulation for the new technology.

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