Along with the economic recovery, recent changes in minimum wage laws at all levels of government have all shifted the labor market. Employers typically find the quality of employees available for 20 percent or so above the minimum wage are well worth the premium. For example, last year's 10 dollars an hour wage at 2 dollars above minimum, was enough to attract reliable and ready workers for most entry level, unskilled positions. Currently California's minimum wage stands at 9 dollars per hour and will go to 10 dollars in January 2016.

 

With the general improvement in California's economy, the increased minimum wage caused a migration of people who were once satisfied with 10 dollars an hour to move to competing jobs offering more. The result is a shortage of entry level workers.

 

Whatever your view of the politics of minimum wage legislation, the reality is the increase changed the dynamics of the labor market. If you found that the two dollar premium over last year's 8 dollar minimum was worth the investment in increased productivity, you need to consider the new level of the wage floor.