In his veto message to the legislature, Gov. Schwarzenegger expressed support for increasing the minimum wage. However, he also stated that automatic increases to adjust for inflation failed to "account for changes in the economy which could have deleterious effects on the economic health of the state." Gov. Schwarzenegger also called the automatic increases an abdication of the legislature's duty "to consider all of the impacts each increase to the wage will have on workers and businesses."
I agree with Gov. Schwarzenegger's sentiments on the issue of automatic increases. The vast majority of economists believe the minimum wage law already costs the economy thousands of jobs. When you force American companies to pay a certain wage, you increase the likelihood that those companies will outsource jobs to foreign workers, where labor is much cheaper. Non-profit charitable organizations are hurt by the minimum wage. Increasing the minimum wage can drive some small companies out of business.
While vetoing the minimum wage law may seem heartless to some, it will likely preserve the jobs of many who might have been put out of work had the law passed.
About the Author: Carl H. Starrett II has been a licensed attorney since 1993 and is a member in good standing with the California State Bar and the San Diego County Bar Association. Mr. Starrett practices in the areas of bankruptcy, business litigation, construction, corporate planning and debt collection.