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, 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.

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.

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.

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.”