I am disappointed in the unequivocal “all good” op-ed piece in the NY Times regarding the minimum wage in LA going to $15 an hour. Everybody supports the idea that low wage earners should get a raise but like every visible hand economic effort there are waves of unintended consequences.
Some of the extreme good against income and wealth inequality that could suffer is the diverse base of small businesses that are already vulnerable. Any business that has less financial strength is going to have a tough time absorbing these changes. Large corporate businesses in the same industry and those small and medium companies that flout employment laws regarding immigration and wage law will be empowered.
Any business in an industry that has competition that can fulfill online sales; pharmacies, groceries, clothing, books, and on and on could be negatively impacted by this legislation.This would result in an impoverished city with less diversity of business ownership especially in those communities that already suffer from a dearth of goods and services.
There are certainly enemies of income and wealth equality and low wages are among them but there are also forces which serve income and wealth equality. Small business and diversity of ownership are and have always been a powerful enabling tool of the best of Americans. Small business entrepreneurs are often stepping out of low wages and the diversity of ownership is the heart of the solution to America’s income and wealth divide. To in any way make more vulnerable this last bastion of diversity in this great division of the spoils is folly. It is folly because forcibly raising the minimum wage this much this fast may have an adverse affect on the very forces which serve the same purpose so well.
A considered look at our cities, especially the great city of Los Angeles, has to include a broad perspective on what kinds of businesses serve us well. We must ask more questions and produce more answers about what is best for our communities in terms of jobs yes, but also goods and services. Beyond that we must ask ourselves who benefits from these businesses by virtue of their ownership.
We are at a great moment in recognizing the economic and moral benefit of income and wealth and opportunity equality. Let us be sure that our efforts serve the greatest good.