Tales & Trails of a Traveling Wiseguy

I'm going through the ballot propositions on the ballot here in the 2024 general election. See part 1 of this series for a few links on how props work and my thoughts about Props 2 & 3; and part 2 of this series for Props 4, 5, and 6. Here are my thoughts on the next few.

Prop 32: Raise the Minimum Wage: Weak No.

Prop 32 is the first measure on this ballot that's a citizen initiative— meaning it was written and qualified for the ballot by private citizens, as opposed to bond measures and constitutional amendments which are approved by the legislature first then must be put to voters for final approval. Citizen led initiatives often have problems. I'll address that in a moment.

Prop 32 would raise the minimum wage state-wide in California. Employers with 26+ employees would have to pay a minimum of $17 starting immediately and $18 on January 1, 2025. For employers with 25 or fewer employees, a minimum of $17 applies starting January 1, 2025, rising to $18 on January 1, 2026.

I've blogged many times about minimum wage and how it's generally too low. From reading my past thoughts you might be surprised that I'm leaning against Prop 32. This has to do with the weaknesses of citizen led initiatives. Often they embody a worthy idea but with a flawed implementation.

This raise to $17-18 is not huge. While you might be thinking about the federal minimum wage, which has been unchanged at $7.25/hr for 15 years, California's minwage is already much higher. Currently the statewide minimum is $16, which took effect January 1, 2024. For fast-food workers a higher rate of $20 took effect April 1. Source: State of California Department of Industrial Relations.

While the statewide minwage is already high compared to the (outdated) federal minimum, cities and counties are free to require higher wages. In my city of Sunnyvale it rose to $18.55 at the start of the year. In neighboring Mountain View it's $18.75 this year, rising to $19.20 on January 1, 2025.

To me the flaw in raising the statewide rate again is that it's not necessarily appropriate everywhere in the state. Sunnyvale and Mountain View are high-cost areas. Many businesses were already having to pay nearly as much due to labor market conditions. But what about areas where costs of living are much less expensive? $17-18 might be too expensive for employers in such areas and unnecessary for employees. I prefer to see statewide laws developed through the legislature's deliberative process, informed by professional input from government agencies such as the Department of Industrial Relations, with cities and counties able to adjust as necessary for local conditions. That's a better way to legislate labor policy that's fair for all stakeholders than asking the broad electorate to make a strict yea-or-nay vote on an overly simple solution to complex policy.

Prop 33: Allow Localities to Expand Rent Control: Yes.

Rent control can be a divisive issue. Some localities in California have rent control. Whether to have rent control, and the specifics of the limits it entails, are decided at the local level. I.e., your city decides if, and how, there's rent control in your city. This measure does not change that fundamental fact. It does not enact rent control anywhere; it only changes the laws that limit what cities are able to do.

A key rent-control law, the Costa-Hawkins Rental Housing Act, was passed in 1995. It placed significant restrictions on which properties local governments can even subject to rent control. One key restriction is that no building built after February, 1995 can be rent-controlled. Nor can any single-family home. And no limit can be placed on the rent increase when a new tenant signs. (Allegedly landlords try to drive out older tenants of rent-controlled properties so they can reprice at market rates.) That 1995 date was not set to be indexed... so today, all condos built within the past 29.75 years are exempt from rent control. That's ridiculous. Prop 33 repeals Costa-Hawkins so local governments have more latitude to enact modern policies that serve their residents.

Prop 34: Slap Punitive Restrictions on the AIDS Healthcare Foundation: HELL NO.

The official title of this proposition is "RESTRICTS SPENDING OF PRESCRIPTION DRUG REVENUES BY CERTAIN HEALTH CARE PROVIDERS." It would required these "CERTAIN HEALTHCARE PROVIDERS" to spend 98% of their revenues from a federal discount prescription drug program on direct patient care. Putting governance on healthcare providers to ensure they spend most of their money on caring for patients seems like a worthy cause, doesn't it? Don't be fooled.

This bill defines "CERTAIN HEALTHCARE PROVIDERS" so that it includes exactly one provider. One. It's the AIDS Healthcare Foundation. It's not any insurance company. The ACA required insurance companies only spend 80% of their revenues on patient care. The people who wrote this measure know damn well who they targeted. Prop 34 is a punitive attack from opponents of Prop 33 to punish an organization, AHF, that was a big supporter of Prop 33. Regardless of what you think of Prop 33, this kind of retaliation through the ballot box is an example of the worst kind of use of California's ballot proposition system. Just say NO. Vote NO.

Right after I posted my almost-leaving-for-Mexico blog from the United Club Lounge yesterday morning I saw this little number: a robot busing dishes.



The first thing that struck me was, "Yeah, this is the kind of thing that happens when we raise the minimum wage." I'm not anti-labor or anti-paying people living wages. It's just the reality of the situation; actions have consequences. Increasing the cost of hiring people increases the number of situations where business find it more cost-effective to employ technology instead. That's a big part of why ordering kiosks are replacing workers at fast food restaurants, there's self-checkout (SCO) at grocery and hardware stores, and— here, for example— robots are doing menial tasks.

The second thing that hit me was, "I wonder if the screen on the back of the robo-cart is asking for a tip." 🤣 Tipping has gotten out of control... especially in cases where automated systems prompt for tips. Like, if I'm ordering from a kiosk and/or paying via SCO, WTF am I tipping for? Whom am I tipping? *I* am literally doing the work!

As far as the first point, this robot has not entirely replaced staff busing tables. There are still a number of people at the United Club Lounge clearing tables. It's likely this robot is an experiment on feasibility and cost-effectiveness.

A few days ago I posted "Tipping is Getting Ridiculous", a blog entry about some of the recent excesses of the growing custom of tipping in the US. The thing is, tipping is not just getting ridiculous, it already is ridiculous.

Tipping was almost nonexistent in the US up through the Civil Ware era. It was brought over by wealthy travelers in the late 1800s who saw it in Europe— where it was a vestige of aristocracy and master/serf economic systems. The wealthy started doing it in this country to seem more sophisticated. (Evidence also exists there were racist motivations to suppress the wages of Black people in service jobs.) Except as European countries modernized into democracies with advanced economies in the mid-20th century and left tipping behind— instead requiring employers to pay all employees fair wages— the US enshrined tipping into law.

Minimum wage law was created by the federal government in 1937 as part of the Fair Labor Standards Act. That Act excluded several categories of labor, though. Employers were able to continue paying restaurant workers as little as nothing. That didn't change until 1966, when minimum wage law was amended to require employers to pay a minimum base wage. Called the tipped wage it was originally half of the full minimum wage, though it was last increased in 1991 to $2.13/hour. As poor as the federal minimum wage has been at keeping up with costs of living, it is $7.25 today. The tipped minimum wage remains $2.13, just 30% of that.

States and localities are able to set minimum wages higher than the federal minimum wage. California, for example, chose to abolish the two-tier system of tipped wages. All employees must be paid at least full minimum wage. And statewide that wage is $15.50. In the city of Sunnyvale, where I live, it's $17.95. But at least 19 states retain the tipped minimum wage of $2.13.

Yesterday I did something I haven't done in over 2 years. I went inside a McDonald's to eat. Oh, I've bought food at their drive-thru occasionally. That McRib I tried for the first time 12 months ago didn't just magically appear on a plate in my dining room, after all. And I've had drive-thru food at least twice more since then— though not McRibs. They just came back after dropping off the menu for 11 months but they aren't that good. Anyway, McRibs— or even any other McDonald's foods— aren't what I'm here to write about today. I'm writing about ordering at McDonald's.

McDonald's has shifted from having traditional cashiers take orders to having customers enter their own orders through self-service kiosks. I don't know how widely that's been rolled out everywhere, but started appearing at the McD's restaurants in my area 2 years ago, and I saw it in a few other areas a few years before that.

A lot of people might say, "Ooh, self service ordering. That's so much easier!" Except it's not. Self-service ordering took much longer than ordering from a cashier.

My order at McDonald's could have been about as short as this:

"Two McDoubles... no pickle... medium fries... and a medium Diet Coke. For here." Then I pay.

...That's with a traditional, human order-taker. With the self-serve kiosk it went like this:

I want 2 McDoubles. They're under "sandwiches". Okay, press for 1. Press again for 2. Save. Keep ordering. Hmm, I want no pickles. Okay, "Modify order". No, not that. Back. Okay, "Customize order." No pickles. Save. No, not "Light pickles". Customize order. Reduce pickles. Save. No, I want both without pickles. Customize order. Press "-" next to "Pickles" twice. Save. Order more. Fries. Medium Fries. Save. Order more. Drinks. Medium drink. Diet Coke. Save. Complete order. For here. Grab table tent. Enter number 17 from table tent. Pay now. Pay with credit card. Tap credit card. Didn't work; tap credit card again. Still didn't work. Put credit card away, pull out my other card, tap. No receipt. Okay, I'll go sit down.

It took me about 5 times as long as ordering used to. And that's supposed to be an improvement? ...Well, it kind of is because McDonald's ability to hire and train people capable of taking orders and getting them correct went markedly down hill several years ago. But still, using the kiosk took about twice as long as repeating my order 3x to a marginally employable cashier.

Of course, the point of these kiosks isn't improving thingst for me, the customer. It's an improvement for the store's operational cost. The kiosks allow them to employ fewer people. Even at minimum wage that adds up. Minimum wage in Mountain View is currently $16.30, rising to $17.10 January 1. The kiosks are an example of what we get when minimum wages rise and the cost of automation technology drops.