Did California Minimum Wage Kill Recycling?

Folks on the Left Coast are wringing their hands, because a major recycling company closed its doors. But they seem to want to gloss-over why that happened. What’s next for California container recycling after rePlanet’s closure?.

Earlier this month, rePlanet suddenly closed all 284 of its recycling centers and terminated 750 employees. In a statement, the company named reduced payments from the state, depressed pricing for scrap aluminum and PET plastic, and higher operating costs due to labor changes as contributing factors.

What labor changes? Well there was the California raise in the minimum wage, and the Obamacare mandate to pay for (very expensive) health insurance. But hey, I’m sure those things didn’t cause a business to close its doors. Those things are approved by the Left! They could never have bad (unintended) consequences. </sarcasm>

As for depressed pricing: Aluminum is down about 40% in the past three years, and cans are 40% lighter than they were in 1972, so there is more work to collecting a material that is worth less. Plastic recycling suffers from low oil prices (“virgin” plastic is cheaper) and the fact that fewer places are accepting “contaminated” plastics. Which is to say, the kind of thing that shows up in curbside recycling bins. (Did you just drop that ketchup bottle in the bin, or did you wash it out and remove the label?)

Add those two together and you have a recipe for disaster.

The good folks who were elected to the California legislature, not willing to learn the lesson of Unintended Consequences, are planning to manage the economy even more. (Because they’ve done such a great job so far.)

So no, it isn’t all down to the minimum wage. But I’m sure that is a big part of it, and Obamacare isn’t without its problems either.

2 thoughts on “Did California Minimum Wage Kill Recycling?

  1. I saw this story a few weeks ago and wanted to look more into it. There seemed to be something wrong in general with their business model but I haven’t had time to look at it. And seriously, people brought in household plastic to be paid for?? Just way too weird

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