GOP entrepreneur: Lift Calif. wage to $12 an hour

Two decades ago, at 32, 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.

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.

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-paying businesses, since the government pays for food stamps and other programs those workers often need to get by. He posits that the increase — from the current $8 an hour — 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.

Aid failed; try pay

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 slightly to cover 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 by 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 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.

State labor leaders might seem likely potential supporters, but at this point, Unz is 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.”