LOS ANGELES (AP) — Democrats across the nation are eager
to make increasing the minimum wage a defining campaign issue in 2014,
but in California a proposal to boost the pay rate to $12 an hour is
coming from a different point on the political compass.
Ron Unz, a
Silicon Valley multimillionaire and registered Republican who once ran
for governor and, briefly, U.S. Senate, wants state voters to endorse
the wage jump that he predicts would nourish the economy and lift
low-paid workers from dependency on food stamps and other assistance
bankrolled by taxpayers.
A push for bigger paychecks for workers
at the lower rungs of the economic ladder is typically associated with
Democrats — President Barack Obama is supporting a bill in Congress that
would elevate the $7.25 federal minimum to over $10 an hour.
But
entrepreneur Unz, 52, is a former publisher of The American Conservative
magazine with a history of against-the-grain political activism that
includes pushing a 1998 ballot proposal that dismantled California’s
bilingual education system, an idea he later championed in Colorado and
other states.
Two decades ago, as a 32-year-old, the
theoretical-physicist-turned-software-developer tried to unseat
then-Gov. Pete Wilson, a fellow Republican. After a long break on the
political sidelines, Unz’s reappearance has startled members of both
major parties, and his proposal — if it goes to voters in November —
could unsettle races from governor to Congress.
"He is a wild card
in the deck of California politics," said Bill Whalen, a research
fellow at Stanford University’s Hoover Institution and former Wilson
speech writer.
Republican National Committee member Shawn Steel
praised Unz for his 1998 initiative, which abolished most bilingual
education programs for students who speak little, if any, English and
replaced them with English-only instruction. But Steel predicted a jump
in the minimum wage would eliminate jobs, penalizing young people who
often hold them.
Unz "is an innovator, he’s extremely bright and he’s a lone wolf," Steel said.
To
Unz, who’s spoken out over the years on issues as varied as campaign
finance to IQ and race, the proposal simply makes sense. As drafted, it
would increase the minimum wage in two steps — to $10 an hour in 2015,
and $12 the following year, which would be the highest among states at
current levels.
His push comes as Seattle’s new mayor, Democrat Ed
Murray, has said he wants workers there to earn a minimum of $15 an
hour, and after fast-food workers staged nationwide rallies calling for
higher income.
Unz says taxpayers for too long have been
subsidizing low-wage paying businesses, since the government pays for
food stamps and other programs those workers often need to get by. He
posits that the increase — at $12-an-hour, up from the current $8 —
would lift millions of Californians out of poverty, drive up income and
sales tax revenue and save taxpayers billions of dollars, since those
workers would no longer qualify for many welfare benefits.
He
dismisses the notion that countless jobs would evaporate, noting that
most of the state’s lower-wage jobs are in agriculture and the service
sector, which can’t be easily automated or transported elsewhere. He
believes higher wages would make the jobs more attractive to U.S.
residents, curtailing a lure for illegal immigration.
For
California, among the world’s 10 largest economies in 2012, the jump
"would be a gigantic economic stimulus package," Unz said in an
interview. He hopes its passage in the nation’s most populous state
would have a ripple effect, prompting other states to increases wages.
Unz
is an unusual figure in California’s largely left-of-center political
culture, untethered to traditional party apparatus, libertarian in his
leanings and wealthy enough to make potential rivals nervous.
He
declined to provide specifics on his personal wealth — he founded Wall
Street Analytics, Inc., which was acquired by Moody’s Corp. in 2006.
He
calls the wars in Iraq and Afghanistan "totally disastrous," lambasts
the government for bailing out Wall Street banks and sees little
difference between Obama and predecessor George W. Bush.
In high
school, he ranked among the top math students in the U.S. and studied
theoretical physics at Harvard University, Stanford University and
Cambridge University, according to his website.
His journalism and
writings over the years — touching on subjects as diverse as college
admissions, immigration and homosexuality — have been described as
everything from insightful to offensive.
In an article for the New
America Foundation, he wrote that the government’s "vast and leaky
conglomeration" of assistance and benefit programs had failed to ensure a
decent living for workers, so "perhaps we should just try raising wages
instead."
Businesses could raise their prices a fractional amount
to cover much or most of the cost of the higher wages, which in turn
would feed the economy with spending, he argues.
He estimates that
discount retailer Wal-Mart, for example, could cover the cost with a
one-time price increase of about 1 percent. Wal-Mart spokesman Kory
Lundberg said he did not know the source of Unz’s calculation and added,
"It seems kind of hard to believe."
Would it be a wash for taxpayers if social spending decreases but the price of consumer goods rises?
Unz
acknowledged it would be difficult to craft a precise analysis, since
it’s difficult to predict if governments would lower taxes or how
different industries would cover the cost, through higher prices or
cutting into profits. But overall, he argued higher wages and lower
welfare spending would be "a very beneficial result."
The proposal
is under review by the state attorney general, and if it clears that
hurdle Unz can then begin gathering tens of thousands of petition
signatures needed to qualify for the November ballot.
It’s hard to
predict its chances of passage, but raising the minimum wage has had
appeal in California in the past — voters endorsed a wage increase by a
landslide in 1996.
Bob Mulholland, a longtime adviser to the state
Democratic Party, predicted the proposal would help Democrats, defining
them as candidates in touch with Main Street.
"I think (Democrats) will see him as a sinner in the past but a welcome angel now," Mulholland
said.
But
it could become a tricky issue for Democratic Gov. Jerry Brown, who is
seeking another term and just signed a law that will raise California’s
minimum wage to $10 an hour by 2016. Businesses are unlikely to welcome
another boost.
"This is the essence of insanity," said John
Kabateck of the National Federation of Independent Business in
California, who said every bump in the wage threatens jobs created by
mom-and-pop businesses also struggling with a new national health care
law.
State labor leaders might seem likely potential supporters,
but at this point, Unz is being viewed cautiously because of his history
in conservative causes. Also, labor is eager to link future increases
in the state minimum wage to the rate of inflation.
"We are not
totally clear on his motivation or his strategy at this point," said
Steve Smith of the California Labor Federation. "He’s not someone who
has a record of supporting workers."
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