Boost minimum wage, GOP entrepreneur says

LOS ANGELES — Democrats across the nation are eager to make increasing the minimum wage a defining campaign issue in 2014, but in California a proposal to boost the pay rate to $12 an hour is coming from a different point on the political compass.

Ron Unz, a Silicon Valley multimillionaire and registered Republican who once ran for governor and, briefly, U.S. Senate, wants state voters to endorse the wage jump that he predicts would nourish the economy and lift low-paid workers from dependency on food stamps and other assistance bankrolled by taxpayers.

A push for bigger paychecks for workers at the lower rungs of the economic ladder is typically associated with Democrats — President Barack Obama is supporting a bill in Congress that would elevate the $7.25 federal minimum to over $10 an hour.

But entrepreneur Unz, 52, is a former publisher of The American Conservative magazine with a history of against-the-grain political activism that includes pushing a 1998 ballot proposal that dismantled California’s bilingual education system, an idea he later championed in Colorado and other states.

Two decades ago, as a 32-year-old, the theoretical-physicist-turned-software-developer tried to unseat then-Gov. Pete Wilson, a fellow Republican. After a long break on the political sidelines, Unz’s reappearance has startled members of both major parties, and his proposal — if it goes to voters in November — could unsettle races from governor to Congress.

“He is a wild card in the deck of California politics,” said Bill Whalen, a research fellow at Stanford University’s Hoover Institution and former Wilson speech writer.

Republican National Committee member Shawn Steel praised Unz for his 1998 initiative, which abolished most bilingual education programs for students who speak little, if any, English and replaced them with English-only instruction. But Steel predicted a jump in the minimum wage would eliminate jobs, penalizing young people who often hold them.

Unz “is an innovator, he’s extremely bright and he’s a lone wolf,” Steel said.

To Unz, who’s spoken out over the years on issues as varied as campaign finance to IQ and race, the proposal simply makes sense. As drafted, it would increase the minimum wage in two steps — to $10 an hour in 2015, and $12 the following year, which would be the highest among states at current levels.

His push comes as Seattle’s new mayor, Democrat Ed Murray, has said he wants workers there to earn a minimum of $15 an hour, and after fast-food workers staged nationwide rallies calling for higher income.

Unz says taxpayers for too long have been subsidizing low-wage paying businesses, since the government pays for food stamps and other programs those workers often need to get by. He posits that the increase — at $12-an-hour, up from the current $8 — would lift millions of Californians out of poverty, drive up income and sales tax revenue and save taxpayers billions of dollars, since those workers would no longer qualify for many welfare benefits.

He dismisses the notion that countless jobs would evaporate, noting that most of the state’s lower-wage jobs are in agriculture and the service sector, which can’t be easily automated or transported elsewhere. He believes higher wages would make the jobs more attractive to U.S. residents, curtailing a lure for illegal immigration.

For California, among the world’s 10 largest economies in 2012, the jump “would be a gigantic economic stimulus package,” Unz said. He hopes its passage in the nation’s most populous state would have a ripple effect, prompting other states to increases wages.

Unz is an unusual figure in California’s largely left-of-center political culture, untethered to traditional party apparatus, libertarian in his leanings and wealthy enough to make potential rivals nervous.

He declined to provide specifics on his personal wealth — he founded Wall Street Analytics, Inc., which was acquired by Moody’s Corp. in 2006.

He calls the wars in Iraq and Afghanistan “totally disastrous,” lambasts the government for bailing out Wall Street banks and sees little difference between Obama and predecessor George W. Bush.

In high school, he ranked among the top math students in the U.S. and he studied theoretical physics at Harvard University, Stanford University and Cambridge University, according to his website.

His journalism and writings over the years — touching on subjects as diverse as college admissions, immigration and homosexuality — have been described as everything from insightful to offensive.

In an article for the New America Foundation, he wrote that the government’s “vast and leaky conglomeration” of assistance and benefit programs had failed to ensure a decent living for workers, so “perhaps we should just try raising wages instead.”

Businesses could raise their prices a fractional amount to cover much or most of the cost of the higher wages, which in turn would feed the economy with spending, he argues.

He estimates that discount retailer Wal-Mart, for example, could cover the cost with a one-time price increase of about 1 percent. Wal-Mart spokesman Kory Lundberg said he did not know the source of Unz’s calculation and added, “It seems kind of hard to believe.”

Would it be a wash for taxpayers if social spending decreases but the price of consumer goods rises?

Unz acknowledged it would be difficult to craft a precise analysis, since it’s difficult to predict if governments would lower taxes or how different industries would cover the cost, through higher prices or cutting into profits. But overall, he argued higher wages and lower welfare spending would be “a very beneficial result.”

The proposal is under review by the state attorney general, and if it clears that hurdle Unz can then begin gathering tens of thousands of petition signatures needed to qualify for the November ballot.

It’s hard to predict its chances of passage, but raising the minimum wage has had appeal in California in the past — voters endorsed a wage increase by a landslide in 1996.

Bob Mulholland, a longtime adviser to the state Democratic Party, predicted the proposal would help Democrats, defining them as candidates in touch with Main Street.

“I think (Democrats) will see him as a sinner in the past but a welcome angel now,” Mulholland said.

But it could become a tricky issue for Democratic Gov. Jerry Brown, who is seeking another term and just signed a law that will raise California’s minimum wage to $10 an hour by 2016. Businesses are unlikely to welcome another boost.

“This is the essence of insanity,” said John Kabateck of the National Federation of Independent Business in California, who said every bump in the wage threatens jobs created by mom-and-pop businesses also struggling with a new national health care law.

State labor leaders might seem likely potential supporters, but at this point, Unz is being viewed cautiously because of his history in conservative causes. Also, labor is eager to link future increases in the state minimum wage to the rate of inflation.

“We are not totally clear on his motivation or his strategy at this point,” said Steve Smith of the California Labor Federation. “He’s not someone who has a record of supporting workers.”

Talk to us

> Give us your news tips.

> Send us a letter to the editor.

> More Herald contact information.

More in Local News

A firefighter stands in silence before a panel bearing the names of L. John Regelbrugge and Kris Regelbrugge during the ten-year remembrance of the Oso landslide on Friday, March 22, 2024, at the Oso Landslide Memorial in Oso, Washington. (Ryan Berry / The Herald)
‘Flood of emotions’ as Oso Landslide Memorial opens on 10th anniversary

Friends, family and first responders held a moment of silence at 10:37 a.m. at the new 2-acre memorial off Highway 530.

Julie Petersen poses for a photo with images of her sister Christina Jefferds and Jefferds’ grand daughter Sanoah Violet Huestis next to a memorial for Sanoah at her home on March 20, 2024 in Arlington, Washington. Peterson wears her sister’s favorite color and one of her bangles. (Annie Barker / The Herald)
‘It just all came down’: An oral history of the Oso mudslide

Ten years later, The Daily Herald spoke with dozens of people — first responders, family, survivors — touched by the deadliest slide in U.S. history.

Victims of the Oso mudslide on March 22, 2014. (Courtesy photos)
Remembering the 43 lives lost in the Oso mudslide

The slide wiped out a neighborhood along Highway 530 in 2014. “Even though you feel like you’re alone in your grief, you’re really not.”

Director Lucia Schmit, right, and Deputy Director Dara Salmon inside the Snohomish County Department of Emergency Management on Friday, March 8, 2024, in Everett, Washington. (Ryan Berry / The Herald)
How Oso slide changed local emergency response ‘on virtually every level’

“In a decade, we have just really, really advanced,” through hard-earned lessons applied to the pandemic, floods and opioids.

Ron and Gail Thompson at their home on Monday, March 4, 2024 in Oso, Washington. (Olivia Vanni / The Herald)
In shadow of scarred Oso hillside, mudslide’s wounds still feel fresh

Locals reflected on living with grief and finding meaning in the wake of a catastrophe “nothing like you can ever imagine” in 2014.

Dorothy Crossman rides up on her bike to turn in her ballot  on Tuesday, Aug. 1, 2023 in Everett, Washington. (Olivia Vanni / The Herald)
Everett leaders plan to ask voters for property tax increase

City officials will spend weeks hammering out details of a ballot measure, as Everett faces a $12.6 million deficit.

Starbucks employee Zach Gabelein outside of the Mill Creek location where he works on Friday, Feb. 23, 2024 in Mill Creek, Washington. (Olivia Vanni / The Herald)
Mill Creek Starbucks votes 21-1 to form union

“We obviously are kind of on the high of that win,” store bargaining delegate Zach Gabelein said.

Lynnwood police respond to a collision on highway 99 at 176 street SW. (Photo provided by Lynnwood Police)
Southbound lanes on Highway 99 reopen after crash

The crash, on Highway 99 at 176th Street SW, blocked traffic for over an hour. Traffic was diverted to 168th Street SW.

The view of Mountain Loop Mine out the window of a second floor classroom at Fairmount Elementary on Wednesday, Jan. 10, 2024 in Everett, Washington. (Olivia Vanni / The Herald)
County: Everett mining yard violated order to halt work next to school

At least 10 reports accused OMA Construction of violating a stop-work order next to Fairmount Elementary. A judge will hear the case.

Imagine Children's Museum's incoming CEO, Elizabeth "Elee" Wood. (Photo provided by Imagine Children's Museum)
Imagine Children’s Museum in Everett to welcome new CEO

Nancy Johnson, who has led Imagine Children’s Museum in Everett for 25 years, will retire in June.

Kelli Littlejohn, who was 11 when her older sister Melissa Lee was murdered, speaks to a group of investigators and deputies to thank them for bringing closure to her family after over 30 years on Thursday, March 28, 2024, at Snohomish County Superior Court in Everett, Washington. (Ryan Berry / The Herald)
‘She can rest in peace’: Jury convicts Bothell man in 1993 killing

Even after police arrested Alan Dean in 2020, it was unclear if he would stand trial. He was convicted Thursday in the murder of Melissa Lee, 15.

Ariel Garcia, 4, was last seen Wednesday morning in an apartment in the 4800 block of Vesper Dr. (Photo provided by Everett Police)
Search underway to find missing Everett child, 4

Ariel Garcia was last seen Wednesday morning at an apartment in the 4800 block of Vesper Drive.

Support local journalism

If you value local news, make a gift now to support the trusted journalism you get in The Daily Herald. Donations processed in this system are not tax deductible.