Minimum Wage Hike a Blow to Young Job Seekers

Governor Brown has indicated he will sign a two-dollar increase in the minimum wage, which he brokered in the Legislature. This is unfortunate news for young and unskilled workers, who will be hardest hit by the mandated 25% hike over the next two years. (In 2012, the California minimum wage was $8.00/hour, compared with the federal minimum wage of $7.25/hour.)

According to the US Department of Labor, minimum wage workers tend to be young. Although workers under age 25 represented only about one-fifth of hourly paid workers, they made up about half of those paid the federal minimum wage or less. Among employed teenagers paid by the hour, about 21 percent earned the minimum wage or less, compared with about 3 percent of workers age 25 and over.

Our youngest residents are also those who are finding it most difficult to find work, even as the economy is in recovery. Young adults face an unemployment rate north of 15 percent, while teenage unemployment is nearly 35 percent.

According to UC Irvine economist David Neumark, we can expect an increase in the minimum wage to be followed by a decrease in youth employment, as much as a 3.75% drop in employment as a result of this legislation. This mandated wage hike will make a terrible situation even worse.

Noted economist Robert Samuelson has written:

Companies that think themselves condemned to losses or meager profits won’t expand. Not surprisingly, a study by two economists at Texas A&M finds that the minimum wage’s biggest adverse effects are on future job growth, not current employment. To this defect must be added another: An excessively high minimum will attract more skilled workers, denying the less skilled an entry point to work and on-the-job training.

Last year, California public high schools graduated fewer than 79% of the 12^th grade cohort that began in the 9^th grade. The graduation rate for Hispanic and African American students was even worse: 73.5% and 65.9%, respectively.

Via: California Political Review

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CALIFORNIA ONE SIGNATURE AWAY FROM STATEWIDE BAN ON LEAD AMMO

Legislation that would completely ban lead ammunition from the state of California is sitting on Governor Jerry Brown's (D) desk, waiting for his signature to become law.

California already has a lead ammo ban in eight counties, but the Democrat-dominated assembly wants to broaden the ban to cover the entire state.

According to Fox News, proponents of the ban claim it will protect endangered species, like the condor. 

Proponents also "point to a 2008 study by the Centers for Disease Control and the North Dakota Department of Public Health that concluded lead is so prevalent in meat harvested through hunting that pregnant women and children should never eat it."

The NRA and others have countered these claims by saying, "the 2008 studies never conclusively linked consumption with illness in humans." Moreover, because copper bullets are more expensive, forcing hunters to buy them instead of lead ammo would make hunting cost-prohibitive for many Californians. This, in turn, would reduce the number of hunters, and "the state would lose millions of dollars in hunting license fees that [currently] pay for conservation efforts."

NRA lawyer Chuck Michel believes the danger posed by lead ammo to condors is overstated, as well: "These condors are flocking around... dump sites. They are vultures. They also congregate around lookout towers, and there are pictures of them eating the chipped lead paint. The point is, there are alternative sources of lead in the environment which are probably the source of the lead."

Gov. Brown has until October 12 to decide whether to sign the bill.

Via: Breitbart

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California: Prop. 13 Protects Against the Yo-Yo Effect

Even for those who aren’t in the market, it’s hard to ignore all the news about rising home prices. According to the California Association of Realtors, median home prices are up nearly 30 percent over just the last year. California has not seen this big of a one year increase since 1977 when it jumped 28.1 percent.

But the huge increase in values in 1977 brought as much anger and fear as anything else because that was just before voters overwhelmingly approved Proposition 13 to rein in out of control property taxes. Those taxes were going up as fast as home prices and forcing many from their homes.

Under the pre-Proposition 13 system, homeowners shuddered in fear when their tax bill arrived because it would be based on what someone else was willing to pay for a home like theirs, not on what they had paid or could afford. Those whose property values were increased by hyperinflation in the housing market were treated as if they were now “rich guys” who should be taxed on their “paper profits.” But those who were committed to homeownership were seeing no benefit. If they did sell their home and realized a profit, they would find that they would need every cent if they wanted to buy another house at the new inflated values.

Some homeowners today will say it is about time home values rebounded, clearly remembering that many homes lost more than 30% of their value when the housing bubble burst half a dozen years ago. However, most will not be troubled by this real estate market yo-yo effect, because Proposition 13 makes their taxes predictable from year to year. A buyer who pays $250,000 for a house knows that they will be taxed at a one percent rate and that annual increases in assessed value are limited to two percent. This means that the basic property tax — voter approved parcel taxes and bonds are extra — does not increase by more than two percent, and this certainty allows the owner to budget for future taxes.

While providing security to homeowners, Proposition 13 also guarantees stable — and almost always increasing — revenue to local governments. The take from property taxes is estimated to increase in the 4 to 5 percent range this year. However, even in years when property values are down, the Proposition 13 system acts like a shock absorber stabilizing revenue, because most property owners continue to pay under this system that allows an annual two percent increase. The exception is for those who bought at the top of the market and have seen a subsequent decline in value below the purchase price. These folks are entitled to a temporary tax reduction until the marked goes up and full value is restored.

Via: Ca Political Review

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Gov. Brown Says Prop 30 Taxes Are All About Schools — Not So

Governor Jerry Brown kicked off his campaign to pass Proposition 30 on August 15, showcasing what Dan Schnur, Director of the USC Jesse Unruh Institute of Politics called “the most expensive ransom note in California political history” – pass the tax increase or the schools get it. The problem is that this tax increase proposal comes with no reforms for school funding, let alone other big-ticket items like pensions, and is likely a band-aid that would lead to more taxes in the future.

The schools are the focus of Brown’s kick-off at a school location but they are not the focus of the funds raised by the initiative.

The schools get no guaranteed new money from Prop 30. That’s not me saying so, that’s a comment from the California School Boards Association quoted in a Sacramento Bee article. “Despite endorsing Brown’s measure, (California School Boards Association) leaders said they ‘want to make it clear to the public that the governor’s initiative does not provide new funding for schools. Instead, it bolsters the General Fund with new revenue.’”

A Wall Street Journal editorial stated that, “The dirty little secret is that the new revenues are needed to backfill the insolvent teachers pension fund.”

Note that the School Boards Association pointed out that the new funding “bolsters the General Fund.” The association is not the only observer to recognize that this tax increase is about the General Fund. The Legislative Analyst Office’s report on Prop 30 stated:  “The new tax revenues would be available to fund programs in the state budget.”

Via: CA Political Review

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