UC minimum wage hike draws skepticism

Two local economists dismissed a plan by the University of California to raise the minimum wage of its workers to $15 an hour.

The Fair Wages/Fair Work Plan, announced Wednesday by UC President Janet Napolitano, requires that all employees hired to work at least 20 hours a week in the UC system be paid at least $15 an hour during the next three years.

California’s minimum wage is currently $9 an hour. It’s scheduled to go to $10 an hour next Jan. 1.

The UC plan, which would be implemented in three phases, would affect about 3,200 full-time employees and thousands of other contracted service workers.

“This is the right thing to do,” Napolitano said in a statement. “For our workers and their families, for our mission and values, and to enhance UC’s leadership role by becoming the first public university in the United States to voluntarily establish a minimum wage of $15.”

Besides raising its own minimum wage, the UC system will also make certain that its contracts and subcontracts – meaning companies that provide services to the UC system – pay on a scale that meets or exceeds the UC pay scale.

But the move, which follows similar pay hikes by the city of Los Angeles and Los Angeles County, makes little sense, said Jay Prag, professor of economics and finance at the Drucker School of Management at the Claremont Colleges,

The University of California will now pay janitors the same wage it does graduate assistants who are trying to become professors, Prag said.

“I’m anti-minimum wage anyway, but this is especially bad,” Prag said. “It’s what economists call compression, when you lump a bunch of people together and pay them the same amount regardless of their education or background. It doesn’t make sense.”

Chris Thornberg, president of Beacon Economics in Los Angeles, called the plan a “ stunt” that will have little if any impact on day-to-day operations on the University of California’s 10 campuses.

“There are very few people working in the UC system who don’t already make $15 an hour,” Thornberg said. “I don’t think it means very much.”

The UC system is the third-largest employer in the state, with an estimated 195,000 employees, according to a UC statement.