Failing State: $15 minimum wage drives clothing manufacturer out of Los Angeles

April 17, 2016
"But at least we won the election! Obama!!"

“But at least we raised the minimum wage! Yay, Jerry Brown!!”

In my posts on the minimum wage and the Left’s push to raise it ever higher, I’ve tried to point out one key truth: Labor is a cost of doing business that businesses have to account for. When costs go up, these firms have only a few choices:

  1. They can pass on the cost to the consumer, risking the loss of customers’ business.
  2. They can cut labor costs by reducing hiring, cutting back hours, laying off employees, and automating.
  3. They can decide the reduced profit isn’t worth it and close shop, costing all employees their jobs.
  4. They can move out of the jurisdiction, probably costing local employees their jobs.

The government of California recently decided to raise the state’s minimum wage to $15 an hour by 2022, an increase of 50% from today’s state-mandated rate. At the bill’s signing, the Governor said the measure didn’t make “economic sense.” (1)

One employer, at least, agrees with him:

Los Angeles was once the epicenter of apparel manufacturing, attracting buyers from across the world to its clothing factories, sample rooms and design studios.

But over the years, cheap overseas labor lured many apparel makers to outsource to foreign competitors in far-flung places such as China and Vietnam.

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.”

When San Francisco raised the city’s minimum wage, a beloved bookstore closed shop because the cost of business had grown too high. Seattle has lost 700 restaurant jobs because the restaurant industry’s thin profit margins cannot support a $15 minimum wage.

And it’s not just current workers who are harmed: low-skill or unskilled youths looking for that first job are going to discover its harder to find one. Not only will fewer jobs be available out of the limited pool of funds set aside for hiring, but employers are going to want more for their money: employees who already have skills, who require less training. The unskilled 17 year old looking for his or her first job is going to be a lot less attractive.

Great work, legislature and governor, activists and union leaders.You’re driving businesses out of state, costing people jobs, and making it harder to find work. Well done.

They say the road to Hell is paved with good intentions. In this case, that road runs through Sacramento.

RELATED: Moe Lane notes that AA was bleeding cash from paying already-uneconomical wages.

Footnote:
(1) I leave it to the reader as an exercise to determine why a governor would sign a bill he says make no economic sense. Or, you can read the article.

 


(Video) Protester to @HillaryClinton – “You are evil and guilty!”

April 16, 2016

But, really, tell me something I don’t know:

The Free Beacon explains:

Two protestors interrupted a Hillary Clinton campaign event on Saturday, with one being escorted out after shouting that the Democratic presidential frontrunner is “evil” and “guilty.”

Clinton was speaking to a crowd of supporters in Los Angeles when two individuals separately protested the rally and her candidacy. One man could be heard shouting, “She is guilty, she is guilty, she is evil,” as security removed him from the event.

Supposedly these were Sanders supporters. If so, take note of this moment: it is the one time I will probably ever agree with Bernie Sanders fans on anything.

Bipartisanship at last!


El Nino collapse appears to be underway

February 10, 2016

I had a feeling the current El Nino was turning out to be an “El Wimpo.” Still, we received some pretty good snowfalls in the Sierras, which is what California really needs, so here’s hoping this is the start of a growing trend.

Watts Up With That?

Global temperature anomalies since 2005; map courtesy Dr. Ryan Maue, Weather Bell Analytics, NOAA

The collapse of El Nino in the tropical Pacific Ocean has begun and it will be rather dramatic. The current strong El Nino event reached its peak intensity level in December 2015 and all indications suggest it will completely flip to La Nina conditions by later this year. One of the important consequences of the current strong El Nino event in the equatorial Pacific Ocean was a spike in global temperatures. However, if recent history is any guide, expect global temperatures to drop sharply after La Nina conditions become well-established in the tropical Pacific Ocean – likely during 2017 and perhaps beyond. –Paul Dorian, Vencore Weather, 5 February 2016

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Drought buster? Up to 10 feet of snow this week for California’s Sierra Nevada

January 5, 2016

Let’s just say “fingers crossed.”

Watts Up With That?

Here is some good news for drought-stricken California; the latest forecast model output from WeatherBell suggests that the Sierra Nevada snow-pack will get a fresh dump of up to 10 feet of snow. The Sierra snow-pack has already been reported as above normal (at 136 percent of normal) in the most recent snow survey conducted by the California Department of Water Resources.

DWR Director Mark Cowin said the heavy snowfall so far during Water Year 2016 “has been a reasonable start, but another three or four months of surveys will indicate whether the snowpack’s runoff will be sufficient to replenish California’s reservoirs by this summer.”

Each water year begins on October 1 and ends on the following September 30. DWR conducts five media-oriented snow surveys in the Sierra Nevada each winter – near the first of January, February, March, April and May – at the Phillips Station plot (elevation 6,800 feet)…

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The Intelligence Lessons of San Bernardino

December 16, 2015

These are lessons our leaders desperately need to (re)learn. Trouble is, I have little faith the current bunch will come anywhere close.

The XX Committee

It’s been nearly two weeks since Syed Farook and Tashfeen Malik, a married couple, murdered fourteen innocent people and wounded twenty-two more in their terrorist attack on a mental health facility in San Bernardino, California. Once the initial shock of that terrible event, the worst jihadist terror attack on American soil since 9/11, began to wane, awkward questions have been raised about just how effective our government’s efforts to combat violent extremism inside our country actually are.

Americans were shocked by the San Bernardino crime, and no wonder: Farook, a native-born citizen, coldly gunned down co-workers who were assembled at an office party, with help from his immigrant wife, both of whom had left their six month-old baby at home when they left for their suicide mission. While female participation in jihadist terrorism is nothing new, this was an unusually brazen and horrifying attack, particularly since given the size of…

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#SanBernardino jihad massacre: Was Christmas itself a target?

December 6, 2015
Fatwa this!

Prophet of jihad

I know it sounds bizarre to us –how exactly does one attack a holiday, and who could hate Christmas so?– but it’s not as farfetched as one might think. In an article for PJ Media, Bridget Johnson looks at the religious angle to what fools were initially describing as “workplace violence:”

But there’s been little attention paid to why [jihadist Syed] Farook’s co-workers were gathered together, technically away from their workplace: the Christmas party.

And terrorist groups have a fondness for the holiday season.

In 2001, shoe bomber Richard Reid attempted to down a transatlantic American Airlines flight on Dec. 22. Acting for al-Qaeda in the Arabian Peninsula, underwear bomber Umar Farouk Abdulmutallab attempted to blow up a Northwest Airlines flight heading from Amsterdam into Detroit on Christmas Day, 2009. On Christmas Day 2011, Boko Haram launched a series of strikes against churches in four cities that killed 41.

(…)

That spring, AQAP released an issue of Inspire magazine that explicitly suggested staging attacks during the holiday season and exploiting Christmas for strategic advantage.

In a bomb-making how-to with the AQ Chef — the nom de guerre for al-Qaeda’s bomb instructor for “open-source jihadists” — the magazine stressed that “choosing the place and time is a crucial factor to success in any operation. Choose targets in your own country. You know the enemy better, you are within.”

Suggested targets were sporting events, election campaign, festivals and any other gatherings regardless of whether or not there’s a landmark involved — “the important thing is that you target people and not buildings.”

Recommended times to strike? Christmas and campaign season, said Inspire.

There’s more: be sure to read it.

One thing many people don’t realize is that, for the jihadist, this is a religious war. Sure, we might recognize that superficially, but most of us don’t really understand its implications. This is a war waged by adherents of one religion, Islam, against all other religions to prove that their god is superior (“Allahu akbar!” means “Allah is greater!”), to reserve all worship for him, alone, and to subjugate and even destroy the other religions, which are seen as, at best, misguided (Christianity), or at worst as downright evil. (Hinduism and Judaism, for example.) The Believer is under religious command to fight these other religions:

And kill them wherever you find them, and drive them out from whence they drove you out, and persecution is severer than slaughter, and do not fight with them at the Sacred Mosque until they fight with you in it, but if they do fight you, then slay them; such is the recompense of the unbelievers. But if they desist, then surely Allah is Forgiving, Merciful. And fight with them until there is no persecution, and religion should be only for Allah, but if they desist, then there should be no hostility except against the oppressors.

(See also, for more)

Like I said, the concept is almost incomprehensible to us Westerners, raised in a secularized, rational society shaped by the Enlightenment, something the Islamic world has never experienced. We burned that need to make war on other religions out of our psyches during the horrific religious wars in Europe in the 16th and, especially, the 17th centuries.

True though it is that the West is still superb when it comes to waging war –we can fight and win savage wars to the death when needed– we don’t go attacking Christmas parties. That makes no sense to us from a military standpoint and it offends our sense of decency.

But, to the jihadist Muslim, it makes perfect sense because the religion is the real target, and therefore you must attack its symbols and celebrations. By doing so you tell its believers that their religion is weak or false, that their god cannot protect them, that safety only lies in submission or conversion to your religion.

When your Lord revealed to the angels: I am with you, therefore make firm those who believe. I will cast terror into the hearts of those who disbelieve. Therefore strike off their heads and strike off every fingertip of them.

This is why Syed Farook and his wife attacked the Christmas party and killed their coworkers and their guests. It wasn’t just a soft, undefended target — it was a celebration of the enemy religion and thus a legitimate target.

This is a religious war, with all the implications those words carry. And until we understand the doctrines and teachings of the religion for which this war is waged —Islam— we’re going to keep losing.


#RaiseTheWage – Applebee’s testing tablet ordering in California

November 22, 2015
"But at least we won the election! Obama!!"

“But at least we raised the wage!”

Action, meet reaction.

Last night I took my wife and our two young grandchildren to Applebee’s. It went great — our 4 and 2 year old charges were more decorous than half the patrons.

But I digress. Here’s what caught my attention: Applebee’s is testing a new ordering policy — using the technology that is rapidly becoming prominent in fast food restaurants. Every table had an online electronic tablet, with the menu, ordering and payment process built in. One can place the order and have the busboy bring your food.

For now, one can still use a waiter for service, but obviously the plan is to reduce or eliminate that service. That makes PARTICULARLY good sense in California, which is rapidly becoming the home of the $15 minimum wage. Moreover, California is one of only 7 states that requires “tip” employees to be paid a FULL minimum wage IN ADDITION TO all tips collected. That can make a meal too pricey — reducing the number of times patrons choose to dine out.

California’s minimum wage is currently $9 per hour and will rise to $10 in January. Here in Los Angeles, the minimum wage has been $15 dollars since June, and there is pressure to make that the statewide minimum.

The upshot? Expect to see more and more restaurants going to electronic ordering and payment systems, and more and more waiters and waitresses out of work, as progressive social justice warriors and the pols who appease them make it impossible to do business in the once-Golden State. Again, for those didn’t learn this in school, math wins:

Labor is a cost, because the business owner has to provide wages and, often, benefits that cost him more money. When a government mandate increases that cost, the business owner has three choices: pass the cost along to the customer, who may decide it’s too much and stop shopping there; cut employee hours and stop hiring to save on labor costs, thus costing potential jobs and putting a burden on workers still employed; and, finally, just decide it’s not worth it anymore and close up shop. In the low-margin bookseller business, Borderlands’ owner chose the last course as the only one viable.

San Francisco’s Borderlands bookstore chose to close its doors because it could no longer make enough money to make staying in business worthwhile. Applebee’s (and I’m sure other restaurants and fast-food establishments) are looking to cut back on labor hours in order to balance the increased cost of labor. In each case, employees have lost jobs as a consequence of government interference in the labor-management relationship. It’s only going to get worse, too as long as statists in government continue to act as if the laws of economics will bend to their will and that their actions have no consequences.

It must be nice in their fantasy world; it’s a shame others have to suffer because of those fantasies.


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