GOV. Jerry Brown made history on Monday, April 4, when he signed legislation that made California the first state in the nation to set its minimum wage to $15 per hour.
“This is about economic justice,” Brown said prior to signing the bill at the Ronald Reagan State Building in Downtown Los Angeles, according to the Associated Press. “It’s about people. It’s about creating a little, tiny, amount of balance in a system that every day becomes more unbalanced.”
Under the plan, California’s hourly minimum is scheduled to rise from the current $10 to $10.50 on Jan. 1, 2017 for businesses with more than 25 employees, $11 in 2018, and an additional $1 per year after until 2022. Businesses with 25 or fewer employees have an extra year to comply. The law also allows the governor to temporarily pause the hike depending on economic conditions and budget deficits.
Los Angeles Mayor Eric Garcetti, who approved in 2015 an ordinance to boost Los Angeles’ minimum hourly wage to $15 by 2020, touted the legislation on Monday.
“Today California leads the nation once again, passing a historic minimum wage increase that will help lift millions of hardworking men and women out of poverty,” he said in a statement.
New York on Monday also passed legislation to gradually boost its statewide minimum wage to $15 an hour. But before the raise is applied statewide, the new minimum will be implemented in New York City first.
“Proud to sign into law $15 statewide minimum wage and the strongest paid family leave policy in the nation,” New York Gov. Andrew Cuomo tweeted after he signed the bill at a labor rally in New York City.
For many Filipino workers, the passage of the law is a victory. Joanna Concepcion, executive director of Filipino Migrant Center, a non-profit organization dedicated to organizing and mobilizing low-income and working-class Filipinos in Southern California, said the group welcomes the passage of laws that would boost the incomes of struggling, hard-working families.
“Many Filipino immigrants in Southern California work multiple jobs in order to place food on the table, pay for health care and other basic necessities on top of supporting family members in the Philippines,” Concepcion told the Asian Journal. “We have seen the detrimental effects this can cause to the health and well-being of many Filipino families and children facing economic hardship.”
In the Asian community, one business organization says that the wage is expected to hurt for small business owners, particularly in the short run.
“Going from $10 to $15, that 50 percent [increase] for a company or small business [is] a big difference,” said Dennis Huang, executive director of the Asian Business Association, a non-profit organization representing Asian American business owners.
One good aspect of the legislation, Huang said, is that the wage increase is mandated statewide, rather than varying in different cities. However, he said he expects that the price of goods for business owners will increase to cover the higher wages, noting that businesses compete on these prices. Huang added that higher wages also equate to increased worker’s compensation, which is an additional expense for businesses.
As for the six years businesses are given to pay employees $15 per hour, Huang said it would have been better if companies had more time to meet the wage requirement.
“I think its a good idea to space it out, but I do think it’s a little bit tighter for small businesses. It takes a little time for them to adjust for this,” he said.
Other business owners, like financial adviser Cynthia Tan, whose firm is based in Los Angeles, welcomed the new legislation.
“I’m a believer in increasing the minimum wage. I believe in providing benefits. If you take care of your employees they will take care of you,” Tan said.
As a financial adviser, Tan works with business owners to reduce their taxes. She said that although payroll taxes rise along with higher wages, businesses are able to write it off on their taxes.
“One of the ways of [reducing taxes] is to increase payroll. The bottom line is, when I talk to different business owners, ultimately the question is: Who do you want to pay? Uncle Sam? Or would you rather give benefits to the employees?” she said.
In the state legislature, Filipino-American Assemblyman Rob Bonta (D-Alameda) who supported the move, said the legislation would have a positive effect on Californians living in poverty and on Filipinos residing in the state.
“For small businesses, when minimum wage earners get more money in their pockets, they’ll be taking that money and spending it in the economy, at retail stores and at Filipino-owned businesses. It will be good for businesses. But overall, it’s more productivity for these workers and employers. It’s healthier employees. These are all good things that small business owners should want. The positive outcomes that studies show far outweigh any negative ones. It’s a win-win for the state of California,” Bonta told the Asian Journal.