The California legislature exceeded a minimum wage increase which warrants that by 2023, the minimal wage will be $15 an hour. It could be perceived as a positive move for the employees but the outcome, in the long run, will be hurting because it will make it challenging to get jobs and the less skilled will lose their positions.
The core reason to oppose the go by the state legislature is that it will be difficult for the residents to acquire a job. The outcome will be business trying to limit their positions, opting for labor-saving options or in the extreme leaving the state. The effect will be a big unemployment that will affect many people with those in the formal sector likely to be hard hit (Slonimczyk & Skott, 2012).
The less skilled employees are expected to be the hardest hit by the move. A majority of Californian’s earn less than $15 an hour. The additional earnings imply that the labor exceeds the employment cost. It will mean that the legislature will have rendered such Californian’s illegal to work and many of the institutions will find themselves hiring at a loss. Most teenagers lack the skills to produce $15 an hour, hence the increased likelihood of the low-skilled worker being eliminated (Slonimczyk & Skott, 2012).
In summary, it is worth emphasizing that the problem of increasing the minimum wage will make it hard to find jobs and the low-skilled employees are likely to lose theirs. The effects will adversely affect the state communities because a majority will be rendered jobless in the long-run. It is thus recommended that a review is done to check the provision to ensure that it is revised to meet the labor needs in the state.
Slonimczyk, F., & Skott, P. (2012). Employment and distribution effects of the minimum wage. Journal of Economic Behavior and Organization, 84(1), 245–264. http://doi.org/10.1016/j.jebo.2012.03.005