Schwarzenegger and Reagan: Two of a Kind
By Dick Meister
California Republicans and other fans of big business
should count their blessings: Gov. Arnold
Schwarzenegger has set out sure-footedly on the anti-
labor path laid down by their hero of heroes, former
Gov. Ronald Reagan.
Like Reagan before him, Schwarzenegger doesnıt believe
low-wage workers should be guaranteed pay above the
poverty level. The Democratic majority in the State
Legislature thought so, but then you know how radical
those Democrats can be. Imagine, they actually passed a
bill that would have raised Californiaıs minimum wage
of $6.75 an hour by a whole dollar over the next two
But to the rescue came Republican Schwarzenegger to
veto the bill. Why, said he, that raise was so great it
would ³create barriers to our economic recovery² by
impeding job growth. The Gipper, who argued against the
very existence of a legal minimum on much the same
grounds, couldnıt have said it better.
The governorıs veto means that an estimated 1.5 million
working Californians most of them adults trying to
support themselves and their families -- will continue
living in poverty, despite the state law that calls for
the minimum to be high enough to guarantee workers ³a
proper standard of living.² At the current minimum,
even those who manage to work full time make just
slightly over $14,000 a year -- $270 a week or about
$1100 a month, minus taxes and other deductions.
Schwarzenegger and Reagan to the contrary, it would be
highly unlikely that an increase in their pay would
slow job growth. Just the opposite has occurred every
time the minimum has been increased, in large part
because of increased spending by those whose pay has
gone up. Like all low-paid workers, they had to spend
virtually every cent they earned, thus raising the
overall demand for goods and services and for the
hiring of new employees to help provide them.
Like Reagan and his business buddies, Schwarzenegger
and his business buddies would rather we not know that
employers of minimum wage workers are getting big fat
subsidies from the rest of us. A recent report from the
University of Californiaıs Center for Labor Research
and Education showed that almost half the $21.2 billion
a year in public assistance paid out in California goes
to families whose working members do not earn enough to
be self-supporting. Private charities provide
additional millions of dollars in aid to the families.
UC Professor Michael Reich, one of more than three-
dozen economists who urged the governor to sign the
minimum wage bill, calculated that the raise could have
saved taxpayers more than $2 billion that will now have
to be spent on social programs for lower-income
It should be obvious, as it is to Schwarzenegger and
company, that employers are shifting a significant part
of their labor costs to us and that welfare costs that
we also shoulder could be substantially reduced if the
minimum wage was raised.
Keeping employers from having to pay a fair share of
what it takes to provide something approaching a decent
life for all of the stateıs working people was but one
of the governorıs recent large favors for his business
Schwarzenegger also vetoed bills that would have denied
state contracts to employers who planned to have the
job done by workers overseas, would have provided
vineyard workers greater protection from pesticides and
would have tightened the rules requiring rest periods
for hotel maids.
Another vetoed measure would have made it difficult for
giant retailers such as Wal-Mart to open more
superstores such as those that already have done great
harm to neighborhood businesses throughout the state.
That prompted a Reaganesque explanation that the bill
³would stifle market competition and expansion of
On the other hand, Schwarzenegger eagerly signed a bill
that limits the rights of workers to sue their
employers over State Labor Code violations.
Like fellow actor Reagan, Schwarzenegger is a fast
study. In no time at all, he may be playing the role of
anti-labor governor every bit as well as did Reagan.
Heıs certainly off to a good start.
Copyright (c) 2004 Dick Meister, a San Francisco-based
columnist who has covered labor and political issues
for four decades as a reporter, editor and commentator