What’s missed in the “minimum wage” brouhaha is that a large segment of those who stay at the minimum wage level actually make $12-$30+ an hour. That’s because — in states such as CA — a full minimum wage must be paid to ALL employees — including “tip” employees. Waiters, busboys, valets, hotel room cleaners, casino employees, etc. make much — often MOST — of their living off tips.
In some other states, these job categories often can be paid a reduced minimum wage — understanding that their total compensation includes tips. Not so in California.
And because these employees make so much in tips, they will NEVER be paid more than the mandated minimum wage. Nor should they be. After all, “tip” jobs are generaally coveted positions. There’s no shortage of qualified workers to fill such jobs — when there are openings.
Are these “tip” workers “mired in poverty”? Are they being “exploited”? I think not!
In California, being a waiter or casino dealer can be a surprisingly desirable job — as more and more college grads with low value liberal arts degrees are discovering. This results in a “misallocation of labor” — overqualified people holding semi-skilled jobs (okay, dealing IS a skilled job!). This distortion also “crowds out” job opportunities for folks who normally would qualify for such employment, increasing long term unemployment among the less educated.
A higher minimum wage will only increase this distortion.