If liberals are going to complain about “greedy” capitalists outsourcing and automating jobs, it would help if they could stop supporting policies that accelerate that trend.The liberals of Los Angeles voted to raise the minimum wage to $15 in 2015, which will be phased in by 2020. This is ahead of the state of California as a whole, which will raise their minimum wage to $15 by 2022.
The effects in Los Angeles should serve as a preview of what’s to come in California statewide. When you’re more than doubling the federal minimum wage, it isn’t just mom and pop shops at risk.Via the LA Times
Now, Los Angeles firms are facing another big hurdle — California’s minimum wage hitting $15 an hour by 2022 — which could spur more garment makers to exit the state.
Last week American Apparel, the biggest clothing maker in Los Angeles, said it might outsource the making of some garments to another manufacturer in the U.S., and wiped out about 500 local jobs. The company still employs about 4,000 workers in Southern California.“The exodus has begun,” said Sung Won Sohn, an economist at Cal State Channel Islands and a former director at Forever 21. “The garment industry is gradually shrinking and that trend will likely continue.”
In the last decade, local apparel manufacturing has already thinned significantly. Last year, Los Angeles County was home to 2,128 garment makers, down 33% from 2005, according to Bureau of Labor Statistics data. During that period, employment also plunged by a third, to 40,500 workers.
The silver lining from all of this? Most of the businesses fleeing California are fleeing to Red States. It’s an unintended consequence of the Fight for Fifteen – but one I suppose we can be grateful for.[Note: This post was authored by The Analytical Economist]