State Minimum Wage Hike Would Raise Taxes, Study Finds
- Share via
SAN FRANCISCO — A ballot initiative to raise the minimum wage would not help the working poor as touted and would force all California families to pay an average of $107 more per year in taxes, according to a Stanford University study.
The study, released this week by Stanford’s Hoover Institution, suggests that raising the hourly minimum wage to $5.75 would drive taxes on goods up $1.1 billion a year.
The minimum wage would be raised from $4.75 an hour to $5 by March 1997, and to $5.75 by March 1998 if California voters approve Proposition 210 next month.
The study, written by Stanford economics professor Thomas E. MaCurdy and economics doctoral candidate Margaret O’Brien-Strain, says an increase would be costly for Californians while benefiting only the poorest of the poor.
Small businesses would be forced to cut jobs, take a profit loss and raise prices if labor costs go up, the report said.
Get the L.A. Times Politics newsletter
Deeply reported insights into legislation, politics and policy from Sacramento, Washington and beyond. In your inbox twice per week.
You may occasionally receive promotional content from the Los Angeles Times.
