Posted by: coastcontact | January 27, 2016

The Downside of Minimum Wage Laws

OPI InfiniteShine nail polish OPI is a nail polish manufacturer in North Hollywood California. They employ about 400 people at that facility. The company is owned by Coty Inc. That company has ten brands of cosmetics. They have announced their decision to move the manufacturing facility to North Carolina.

The North Hollywood facility includes marketing and sales offices. You can be fairly certain that no more than 10% of that 400 employees are involved in the marketing and sales. Those jobs are relatively high paying office functions. In other words about 360 jobs will be leaving the North Hollywood facility.

Cosmetics manufacturing consists of many low paid jobs. The minimum pay in California is now $10 an hour. That minimum in North Carolina is $7.25 an hour. It doesn’t take a genius to understand why the manufacturing is moving out of California.

The idea of raising the minimum pay is commendable but how much consideration was taken on the impact. There will now be 360 low paid factory workers without jobs.

Toyota moved most of its operations from a Los Angeles area suburb just two or three years ago. They moved to a Dallas Texas suburb. No doubt the cost of labor played into that decision.

There is the question. Have we really helped the poorest paid in California when jobs are driven from the state by higher minimum wage laws?

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