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Higher Minimum Wage: Good Or Bad For The Economy?

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Relay Robot will assist guests at RAR Hospitality's Fairfield Inn in San Marcos
Relay Robot will assist guests at RAR Hospitality's Fairfield Inn in San Marcos

A ballot initiative to raise San Diego’s minimum wage in 2016 from $10.50 to $11.50 provided a test case for upward movement of the minimum wage throughout California this year to $11.50 — and $15 by 2023. There is some evidence the higher minimum wage has stifled job growth for some low-wage workers, while boosting wages for thousands of others.

A report from the U.S. Bureau of Labor Statistics found a year-over-year drop in food-service job growth, which fell from 6.6% growth to a 0.3% decline by February 2017, which translates to 4,000 food-service jobs either not created or eliminated, the San Diego Union-Tribune reports. Robots are expected to eliminate even more minimum-wage jobs in the near future, with McDonald’s rolling out self-ordering kiosks, Starbucks testing an automated barista, and one company promising a robotic arm called “Flippy” that cooks and flips burgers.

In San Diego County, unemployment dropped from 4.5% in January to 4.2% in February, according to a California Employment Development Department report, and down from 4.8% a year ago. After adjusting for seasonal variation, the rate was 4.1%. The local labor market was stronger than the rest of the state (5%) or nation (4.7%), with employers adding 6,600 jobs in the first two months of the year and 26,700 jobs over the last 12 months.