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

From Investor's Business Daily.

"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.

NOTE: This editorial was updated to reflect the fact that the University of California had decided to raise its own minimum wage to $15 starting next school year, independent of the California law."