Many cities across the United States have started contemplating local minimum-wage ordinances in an effort to fight the growing issues of poverty and income inequality. And California cities are no exception as many, from Los Angeles to San Diego to San Francisco, have begun to pursue similar plans. But as admirable as the motivations behind these minimum-wage proposals are, they are ultimately not the right long-term cure for the disease.

In contrast, one important part of the right medicine is the little heralded race for the nonpartisan California state superintendent of public instruction. But to understand why, we first have to understand that California’s high rate of poverty is largely due to two factors.

First is the ongoing technology-driven decline in demand for low-skilled tasks in our labor markets as information technology increasingly fills the needs formerly met by low-skilled workers. The second issue is the large share of low-skilled workers in the state’s economy. One-fifth of the labor force has not earned a high school degree – twice the national average. The basic forces of supply and demand largely explain why the lowest-skilled workers among us have seen their real earnings degraded over the past two decades.

Raising the minimum wage might help some of these workers in the short run. But it will come at the expense of jobs, which will hurt other workers, and might ultimately slow growth in the local area, hurting future workers. The city of Los Angeles is considering raising the minimum wage to $13.25 by 2017. But even at a base of $13.25 an hour we are talking about an annual income of only $26,500 – not much in a place as expensive to live as Los Angeles. In short, it is a treatment that isn’t terribly effective and has many unpleasant side effects – if the minimum wage were a medical procedure, the Food and Drug Administration would almost certainly not approve it for use.

The real long-term solution to poverty is to address the cause of the problem, the growing number of low-skilled workers, rather than the symptom – the low wages they earn. And this starts primarily with efforts to improve educational systems from prekindergarten all the way to colleges and universities. The median earnings for someone with a bachelor’s degree today in California is more than $50,000 – twice as high as the suggested minimum wage proposed in Los Angeles. Advancing from a high school degree to a college degree increases lifetime earnings by an estimated $600,000, not including other advantages that come with higher-end jobs such as better benefits, fewer bouts of unemployment and the skills to adapt to a constantly changing work environment.

Making sure that more students are prepared to go to college and succeed is important not only for those individuals, but by reducing the share of low-skilled workers it also benefits those who aren’t able to make the leap by reducing competition for the low-skilled jobs that still exist.

This isn’t to say that changes for the better are not occurring. Public education at the K-12 level is steadily improving in California. But the data shows that we have a long way to go because the target is not stationary. Technological change is happening faster than educational reform. Combine that advancement with ongoing economic problems and the results are chilling. According to the California Department of Education, graduation rates in the state dropped from just above 90 percent in 2005 to 85 percent last year for enrolled students. In Southern California, the best estimates available suggest that fully 20 percent of young adults still fail to complete high school.  

At-risk students

Not surprisingly, the students most at risk are in low-income neighborhoods. Unfortunately, these same students are also being given a substandard education according to a ruling handed down by Los Angeles Superior Court Judge Rolf M. Treu in the landmark case of Vergara vs. California. By his analysis, these schools have become the dumping ground of the least qualified teachers in the Los Angeles Unified School District system – educators protected by the overly generous state tenure laws, but so bad at their jobs as to not be tolerated in better school districts where parents are more involved. Treu ruled that the tenure system as it currently exists is unconstitutional – although he understood that his decision would be controversial and immediately put it on hold pending appeal.

This brings us back to the race for state superintendent of public instruction between current officeholder Tom Torlakson and his challenger Marshall Tuck. Torlakson has vowed to fight the Vergara ruling. Tuck has pledged to drop the appeal to Vergara if elected. On this issue, the right choice should be clear to both candidates. Removing tenure laws that lead to disadvantaged students being given substandard educations is one of the most important steps we can take on a long road to fixing a system that leaves too many students behind.

Christopher Thornberg is an economist and founding partner of Beacon Economics in Los Angeles.