California conservative multimillionaire supports minimum wage increase

Ron Unz, an entrepreneur and registered Republican with conservative credentials, argues raising California's minimum wage to $12 an hour will ease low-paid workers' dependency on food stamps and other government assistance programs.

|
Kevork Djansezian/AP
Ron Unz, poses inside the Las Families Del Pueblo child care center in Los Angeles in August 1997. Unz, a Silicon Valley multimillionaire and registered Republican who once ran for governor and, briefly, US 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.

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, US 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 in an interview. 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 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'sminimum 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 wagethreatens 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."

You've read  of  free articles. Subscribe to continue.
Real news can be honest, hopeful, credible, constructive.
What is the Monitor difference? Tackling the tough headlines – with humanity. Listening to sources – with respect. Seeing the story that others are missing by reporting what so often gets overlooked: the values that connect us. That’s Monitor reporting – news that changes how you see the world.

NAME — Ron Keeva Unz

AGE-BIRTHPLACE — 52, Los Angeles

EDUCATION — Harvard University, bachelor's degree, magna cum laude, 1983, studied theoretical physics and classical history; Cambridge University, England, 1983-1984, Winston Churchill Foundation scholar, physics; Stanford University, doctoral study in physics, 1984-87.

EXPERIENCE — 1987, founded Wall Street Analytics, Inc., a financial services software company that was acquired by Moody's Corp. in 2006; 2006-2013, publisher, The American Conservative magazine; 1999, ran briefly for U.S. Senate; 1998, spearheaded California proposition that dismantled state's bilingual education system; 1994, challenged Gov. Pete Wilson in Republican primary election, received 34 percent of the vote.

FAMILY — Single

QUOTE — Raising California's minimum wage to $12 an hour "would be a gigantic economic stimulus package."

Dear Reader,

About a year ago, I happened upon this statement about the Monitor in the Harvard Business Review – under the charming heading of “do things that don’t interest you”:

“Many things that end up” being meaningful, writes social scientist Joseph Grenny, “have come from conference workshops, articles, or online videos that began as a chore and ended with an insight. My work in Kenya, for example, was heavily influenced by a Christian Science Monitor article I had forced myself to read 10 years earlier. Sometimes, we call things ‘boring’ simply because they lie outside the box we are currently in.”

If you were to come up with a punchline to a joke about the Monitor, that would probably be it. We’re seen as being global, fair, insightful, and perhaps a bit too earnest. We’re the bran muffin of journalism.

But you know what? We change lives. And I’m going to argue that we change lives precisely because we force open that too-small box that most human beings think they live in.

The Monitor is a peculiar little publication that’s hard for the world to figure out. We’re run by a church, but we’re not only for church members and we’re not about converting people. We’re known as being fair even as the world becomes as polarized as at any time since the newspaper’s founding in 1908.

We have a mission beyond circulation, we want to bridge divides. We’re about kicking down the door of thought everywhere and saying, “You are bigger and more capable than you realize. And we can prove it.”

If you’re looking for bran muffin journalism, you can subscribe to the Monitor for $15. You’ll get the Monitor Weekly magazine, the Monitor Daily email, and unlimited access to CSMonitor.com.

QR Code to California conservative multimillionaire supports minimum wage increase
Read this article in
https://www.csmonitor.com/USA/Latest-News-Wires/2014/0112/California-conservative-multimillionaire-supports-minimum-wage-increase
QR Code to Subscription page
Start your subscription today
https://www.csmonitor.com/subscribe