Opinion: On minimum wage, does Larry Elder not know or not care?

Media personality Larry Elder might be the most controversial candidate in the upcoming election to recall California Gov. Gavin Newsom.

Elder has no shortage of right-wing and often inflammatory views on topics such as coronavirus vaccines and climate change. His ideas about California’s minimum wage, however, have gained extra attention as he races to replace Newsom.

Elder doesn’t believe in a minimum wage. In an interview with McClatchy’s California-based editorial boards earlier this month, he made that quite clear. “The ideal minimum wage is $0,� he said.

Economists and labor experts say that a minimum wage is absolutely necessary to protect workers and to keep as many low-wage employees as possible above the poverty line.

“Income inequality has grown like crazy, and it’s because workers have no bargaining power,� said Sylvia Allegretto, a labor economist at UC Berkeley. Most workers would have no chance at a fair wage without a set minimum, she said.

The federal minimum wage sits at $7.25 per hour, but California has one of the highest in the country, at $13 or $14 depending on the size of the employer.

If Elder were to become governor and get California’s minimum wage law abolished, only a portion of workers would be protected by the federal standard, according to Arindrajit Dube, an expert on minimum wage at the University of Massachusetts, Amherst. There are loopholes and exceptions that would allow some wages to dip below $7.25, Dube said.

“Attacking the California minimum wage would be particularly devastating,� he said. “It would cause an enormous pay cut for about a third of workers, which would be one of the most egregious disasters for working Californians that I can think of.�

It’s also worth noting that the vast majority of Americans support raising the minimum wage to $15.

So why is Elder suggesting something that will probably hurt Californians and is evidently unpopular with voters? To be clear, he’s not the first to advocate for no minimum wage. It’s a common libertarian view based on the principle that government should not interfere with private affairs.

UC Berkeley’s Michael Reich, economist and co-chair of the Center on Wage and Employment Dynamics along with Allegretto, has heard that theory before, he said, but it holds no water.

“The idea is that an employer and employee should be free to choose whatever wage rate they agree upon, and there’s nothing coercive about it,� Reich said. “But that employee needs a job more than an employer needs that particular worker, so it’s a very uneven playing field.�

I’m not inside Elder’s head, but as I see it, there are two possible reasons why the prominent recall candidate would be so vocal about his beliefs on eliminating a minimum wage. One possibility is that he knows it’s a divisive position that will get him attention.

The other possibility is that Elder genuinely doesn’t understand that laborers and employers are not on even ground when it comes to negotiating a salary. To me, that’s far more concerning.

If the minimum wage is abolished in California, “it will be a race to the bottom like we’ve never seen before,� according to Allegretto. Desperate workers would be forced to accept unlivable wages, she said.

In his interview with McClatchy journalists, Elder asserted his libertarian stance. “Why two people who are adults can’t determine what the price of labor ought to be, is beyond me,� he said.

Elder’s words expose his ignorance more effectively than anyone else’s could. If he can’t understand why two adults can’t fairly negotiate the price of labor, then he fundamentally misunderstands the uneven power dynamics between workers and firms.

“Workers know that they’re getting the short end of the stick,� Allegretto said. It’s unrealistic to suggest that an employee can simply bargain their way to a fair salary without any external support. Elder’s line of thinking is “completely out of touch with the history of the vast and ever growing inequality in this country,� she said.

The individual selling their labor will always have less leverage than their employer. It’s right in the name that capitalism prioritizes capital, not laborers. If Elder really thinks that the ideal minimum wage is zero dollars, and thinks that would result in fair salaries, then his understanding of capitalism is far off.

Allegretto and Reich agree that Elder’s statements are most likely no more than a publicity stunt. “Anything he can do to stay in the media, no matter how outrageous it is, is going to help him,� Reich said.

“It’s an asinine and out-of-step concept,� Allegretto said. “It can’t be done, it won’t be done. It’s just this far-right rhetoric.�

To give Elder the benefit of the doubt, maybe he’s not just looking for attention. But if his ideas on the minimum wage truly reflect his values and intentions as a potential governor, then he’s even more dangerous for California than we thought.