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Newsom channels Wile E. Coyote with minimum healthcare wage hikes


Gov. Gavin Newsom is having a Wile E. Coyote moment.

You know the one.

It’s when the shifty Wile E. has come up with a foolproof plan to do in the Road Runner.

But instead of the short-fused bomb taking out the Road Runner it blows up in the coyote’s face.

The old Saturday morning cartoon metaphor for the danger of not considering unintended consequences before you light a fire is perfect for the current situation.

The “situation” that Newsom found himself in with the budget time bomb going off on June 1.

That’s when legislation he championed and signed into law just last October will blow another $4 billion hole in the state budget that already has a $45 billion deficit.

At the stroke of midnight, a new state law goes into effect mandating the minimum-wage for healthcare workers — depending upon their jobs — to increase between $18 and $23 an hour.

There are some other nuances that are factored in such as the type and size of the healthcare provider employer.

The current minimum-wage for all Californians — except the chosen with fast food jobs — is $16 an hour.

Thanks to the largeness of Newsom and one of the deepest blue state legislatures in the nation, the minimum-wage for all healthcare workers in California right down to janitors will increase to $25 an hour by 2028.

Why this is a problem for Newsom is simple. The state will incur higher Medicare costs plus employee costs at state-run medical facilities. The Legislative Analyst’s Office tried to warn the governor the state would take a $4 billion annual hit. But Newsom knows best.

And who could blame him? He was still basking in the glow of a record $97 billion budget surplus last year.

And like any good politician eager to take credit for good things and to play Santa, he set out to correct societal wrongs.

Two of them were low-paid fast-food workers and low-paid healthcare workers.

As a caveat, keep in mind they may not seem low-paid to you depending upon your situation, but when you have friends in Sacramento you get to go to the front of the money line, whether you’re a corporation like PG&E or a labor union representing healthcare workers.

Keep in mind, the Legislative Analyst’s Office wasn’t being pro-business or siding with private sector healthcare providers that were fighting the mandated minimum-wage increase.

It was merely pointing out the significant, and potentially, unsustainable financial consequences.

If the Republican Party hadn’t gone sideways years ago and taken the bait to engage in cultural wars in California of all places, they likely would have had strong enough numbers to engage in give and take when it came to minimum-wage.

There is a middle ground somewhere between the fact the minimum-wage of $16 now comes with annual inflationary increases and mandating that the minimum-wage of an entire sector of the state’s economy increase over 50 percent in four years.

Last week, Newsom and the California Legislature were scrambling to find a way to dodge the bullets that they have loaded in the proverbial gun that they now realized is pointing at them and will start firing June 1.

Newsom’s solution? He is now proposing tying minimum-wage increases for healthcare workers to revenue in the state’s general fund.

But that’s not all.

Newsom wants to exempt healthcare workers at state facilities from the minimum-wage law for healthcare workers he not only championed but openly proclaimed as being a blow for social justice.

This is not Newsom’s first “do I as say but not as I do” foray.

The most famous, of course, was his Marie Antoinette moment at the French Laundry — the fancy food joint in Napa Valley where appetizers can set you back $300 — when he didn’t wear a mask while dining at the height of the pandemic as he had ordered every other Californian to do.

The most recent was legislation he signed in March to exempt fast-food operations on state property from the $20 per hour minimum-wage law for fast food workers that went into effect on April 1.

So how foolhardy for the state is tying raises in the minimum-wage paid healthcare workers to state revenue?

Very foolhardy. And Newsom knows why after almost six years as governor.

The state general fund has a feast-famine cycle tied into capital gains taxes.

That means when people cash in on investments — primarily tech stocks in California — the money rolls into Sacramento faster than empty promises roll off the tongues of politicians.

Then when things settle down, revenue craters.

The ability to successful maneuvers between revenue troughs and peaks is undermined by the tendency of the Legislature and the governor to spend like drunken sailors on a five-day shore leave sandwiched between 12-month long tours at sea.

If you can’t overall the tax system in place, then you need to learn how to live within its wild swings.

What Newsom and company did during the last 18 months between a $97 billion surplus and a $45 million deficit was to spend $142 billion, of which much was one-time money.

But instead of prudently spending one-time money on one-time expenses, the state spent it on reoccurring expenses.

That includes such things as expanding healthcare to all those illegally in California, which is now being retracted due to the budget crisis.

And it includes the $4 billion in reoccurring Medicare and state healthcare worker costs that Newsom is desperately trying to delay from being implemented.

His solution only guarantees more unsustainable expenses will be built into future revenue crashes.

It’s ironic.

Seven months ago, Newsom was basking in the glory of how progressive California was when he signed the law into effect to increase fast-food and healthcare minimum wages on April 1 and June 1 of this year respectively.

A few months later he sounded the retreat on fast-food wage hikes for such operations on state property.

And now he wants to delay minimum-wage hikes for private sector healthcare and exempt state healthcare workers from the universal mandates for which he was the prime architect.

It just goes to show you politics can be stranger than Looney Tunes.

—  This column is the opinion of editor, Dennis Wyatt, and does not necessarily represent the opinions of The Courier or 209 Multimedia. He may be reached at dwyatt@mantecabulletin.com



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