Prop. 32 would raise the minimum wage. But would it solve our cost-of-living crisis? | Opinion

For the past decade, California has embarked on a grand experiment to turn the minimum wage into a “living wage.” It’s a laudable goal, but also one that has failed to have its desired impact. Now, pointing to the state’s affordability issues, proponents of Proposition 32 would have you believe raising the minimum wage from $16 to $18 per hour offers a solution for entry-level workers who struggle to keep up with California’s soaring rents.

Yet, proponents of Prop. 32 have nothing to say about the elephant in the room: Housing costs are a pain point in California because our housing is too expensive to build, and its supply is woefully insufficient to meet demand. In this way, Prop. 32 is just another attempt to paper over glaring structural and policy-related failures.

Here’s what we know: Having the highest minimum wage in the country has failed to ease Californians’ economic anxiety. Instead, California consistently flirts with being one of the most expensive places to live in the country.

According to the Public Policy Institute of California in a June survey, the “cost of living, economy and inflation” continues to be top issues for the state’s voters. In fact, most Californians believe the state’s cost of living represents the most important problem facing the U.S. in general, and they believe the economy is going in the wrong direction.

Make no mistake: Wage mandates raise prices for consumers, especially for your local grocery store. With profit margins averaging just between 1% and 2% for grocers, grocers cannot absorb higher labor costs without increasing prices if they want to keep their doors open. Even worse, grocery prices would be set to rise just as grocery inflation has finally cooled, having been severely impacted by the pandemic.

When faced with higher labor costs, business owners are left to choose between two options: increasing their prices or finding efficiencies to absorb new costs. The Sacramento Bee’s Editorial Board acknowledges this reality, writing that a higher minimum wage would lead to more automation of entry-level jobs and fewer job opportunities.

But what is the solution to this problem? New laws that stymie innovation and technology, eliminating the option for business owners to find new efficiencies? In this scenario, business owners would be forced toward the only other possible solution: higher prices for Californians.

The Golden State has chased a golden wage that is always just outside its grasp and unable to solve its affordability crisis. Voters should reject Prop. 32, and, instead, advocate for their representatives to promote substantial housing development and other policies that would bring down or stabilize costs for everyday expenses.