Leaving for Las Vegas: California’s minimum wage law leaves businesses no choice

Guest Post by Houman Salem

California’s minimum wage jumped to $10.50 an hour at the start of the new year. As the founder of a small fashion design house and clothing manufacturer in San Fernando, I’m not a disinterested observer in this change.

After two years in business, my company now has more than 150 clients from all over the world and 18 employees. It’s what’s known as a cut-and-sew house, part of the garment industry that generates about $17 billion in annual economic activity in Los Angeles County, including $6.9 billion in payroll, according to a 2016 industry report by the California Fashion Assn. This is the epicenter of apparel design and manufacturing in the United States; domestically manufactured clothing is more expensive, but retail and wholesale customers who care about quality and working conditions have historically been willing to pay for it.

Unfortunately, the industry is on a downward trend. Los Angeles County used to have more than 5,000 apparel factories; today, my company is one of roughly 2,000 — and  many (e.g. American Apparel) are looking for a way out. One Los Angeles Times headline, quoting a California State University economist, warned that “the exodus has begun.”

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OBAMACARE DESTROYING JOBS & DRIVING HEALTHCARE PRICES SKYWARD FOR FAMILIES

You were wondering why retailers are reporting dreadful results? Look no further than Obamacare. Manufacturers overwhelmingly report higher employee contributions, deductibles, out-of-pocket maximums and copays, with a lower range of medical coverage and a lower size and breadth of the network.

Have your health insurance costs gone down since Obamacare was passed in 2009? And now for the best part. Obama illegally delayed all the really bad stuff until after the November elections. It seems the Democrats don’t want to run on this abortion of a program.

I’m still waiting for my $2,500 of savings. I’m sure the check is in the mail.

Was Dear Leader misquoted?

 

Obamacare Is A Disaster For Businesses, Philly Fed Finds

Tyler Durden's picture

Remember all those allegations that Obamacare would be an unmitigated disaster for businesses, especially smaller companies? Well, now we have proof.

As the Philly Fed, which mysteriously soared at the headline level even as the vast majority of its components tumbled, reported moments ago, “in special questions this month, firms were asked qualitative questions about the effects of the Affordable Care Act (ACA) and how, if at all, they are making changes to their employment and compensation, including benefits.”

What the survey found was very disturbing: not only did businesses report that as a result of Obamacare the number of workers they employ is lower than higher (18.2% vs 3.0%), that there has been an increase in part time jobs (18.2% higher vs 1.5% lower), leading to a big increase in outsourcing and most importantly, Obamacare costs are being largely passed on to customers (28.8% reporting higher vs 0.0% lower), the punchline was that while there is basically no change in the number of employees covered (17.6% higher vs 14.7% lower and 67.6% unchanged), there has been a big jump in Premiums, Deductibles, Out-of-pocket maximums, and Copays, which has been “matched” by a far greater reduction in the range of medical coverage and the size of the network.

In short a disaster.

And what’s worse, this sentiment will persist long after the current subprime auto loan-driven manufacturing renaissance is long forgotten.