Monday, March 16, 2015

Oakland's Minimum Wage Hike is Crushing the Childcare Sector and the Domino Effect

There are some very confused people roaming around the Bay Area. Some of them even voted for a measure that is screwing up their own businesses. Crony capitalists they are not, useful idiots, perhaps. From the San Francisco Chronicle:

Workers who benefit from Oakland’s minimum wage hike might soon lose a service that enables them to work in the first place. It turns out the well-intentioned law is putting a financial squeeze on Oakland’s child care industry, leading some providers to panic.

“We’re scrambling to find ways to keep the doors open,” said Capt. Dan Williams, Alameda County coordinator of the Salvation Army. He says the added payroll costs of providing workers with a $12.25-an-hour wage have put his organization’s Booth Memorial Child Development Center and family shelter $146,000 over budget, which is “quite a bit for a facility that was barely making it as it was.”

If the Salvation Army can’t scrounge up that money by writing grants and finding donors, it might have to cut some of its 63 child care slots. A number of other day care centers face the same predicament.

Child care centers operate on razor-thin margins — thinner, even, than those of the restaurant industry — and many are lucky to wind up in the black at the end of the year. A restaurant can raise prices to meet the new cost of doing business, but child care operations have limited flexibility...

“That’s one of the unintended consequences” of Oakland’s Measure FF, the November ballot measure that raised the city’s minimum wage from $9 an hour, said Richard Winefield, executive director of the nonprofit child care referral service Bananas. “A lot of (centers) are run on very narrow margins, and when they increase the hourly rate on their employees, they need to pass that on in tuition costs, so families need to fork over more money.”

But many families don’t have the wherewithal to pay more, Winefield said. And as a result, they’re getting priced out...

Lift Up Oakland, the group that campaigned to get the minimum wage raised, maintains that businesses will not be hurt by Measure FF. The group, on its website, estimates, “Operating costs will increase by 0.3 percent for retail and 2.8 percent for restaurants.”

Asked if Lift Up Oakland anticipated problems for the city’s child care sector, spokeswoman Beth Trimarco said the campaign “did not specifically analyze impacts on all industries.”...

[W]orkers in the city’s child care industry said they supported Measure FF even though they knew it could create hardship for their businesses.

“Knowing what trouble it caused us, I also happily voted for it,” said Liisa Hale, co-director of the East Oakland day care center BlueSkies for Children.



  1. Ahhh yes, the beauty of unintended consequences....

  2. Nice find Wenzel. You should keep a good list of these so it's more of a data base or catalog more are to come I am sure.


      works pretty well.

  3. Yet more confirmation that the driving force behind the perpetual confusion on the left (liberal dilemma) is actually a deep sense of self loathing.

  4. Wait, economics 101 taught us something valuable!

  5. This is a win. If its harder to outsource parenting, that can only be a good thing.