CALIFORNIA Gov. Jerry Brown on Monday, March 28, announced a deal reached with state legislators and labor leaders that would raise the minimum hourly wage to $15.
The move would make California the state with the highest minimum wage in the nation, although this could change as other states such as New York are also working toward raising wages to that level. It would also boost wages for nearly 6.5 million California workers, or about 43 percent of the state’s workforce, according to USA Today.
“I’m hoping that what happens in California will not just stay in California but will be expor4ted to the rest of the country,” Brown said during a news conference in Sacramento.
California’s current minimum wage, $10 per hour, is one of the highest in the United States. Under the plan, hourly wages would rise to $10.50 in 2017, $11 in 2018, and an additional $1 per hour each until it hits $15 in 2022. Under the proposal, the governor can temporarily pause the hike depending on economic conditions and budget deficits.
“This plan raises the minimum wage in a careful and responsible way and provides some flexibility if economic and budgetary conditions change,” Brown said.
The deal still requires approval from the state Legislature, which appears likely, as Democrats rule both the Senate and Assembly, but is not guaranteed. One hurdle is getting business-friendly moderate Democrats who may object to the plan on board.
Among supporters of the potential legislation were labor advocates, who touted the pact.
“This is a very, very significant increase and for the first time would begin to reverse years of falling pay at the bottom” of the income ladder,” said Paul Sonn, general counsel of the National Employment Law Project, USA Today reported.
Dave Regan, president of SEIU-United Healthcare Workers West, which represents more than 85,000 California hospital workers, said even if the proposal has potential economic downsides, the fact it empowered workers to play a role in the outcome of the minimum wage could be transformative politically, The New York Times reported.
“There’s so much cynicism, anger,” Regan said. “To have the governor and legislature responding in a positive and constructive way to our members is really important. It shows, ‘Wow, what we do really does matter.’”
Opponents of the wage hike, including business groups and Republicans, say it will result in fewer jobs for low-skilled workers.
Brian Hibbs, the owner of a comic and graphic novel store called Comix Experience, told the Associated Press he favors the idea of a minimum standard of living, but thinks increasing wages will not do that because it will negatively impact small businesses. He anticipates that by 2018, with the wage hike, payroll for six workers will cost an additional $40,000.
“I don’ t think this was thought through,” Hibbs said, according to the AP. “The cost of labor is so high. It’s very, very difficult to run a profitable business at this point.”
The negative impact of a higher minimum wage, however, may not be as severe as some anticipate. Michael Reich, an economics professor at UC Berkeley, said this could be offset by because workers would have greater purchasing power, which could boost economic activity.
Cities like Los Angeles, San Francisco and Seattle have opted to boost their minimum wages to $15 an hour throughout the next few years.
In March, Oregon Gov. Kate Brown, a Democrat, signed legislation that makes it the first state in the country requiring higher pay in cities than in rural areas. By 2022, the minimum wage in Portland is set to hit $14.75 per hour.
Gabe Horwitz, the economic program vice president at Third Way, a left-center Think Tank, called California’s plan “blunt” in comparison to that in Oregon.
“Fifteen dollars an hour may work in places like San Francisco or Los Angeles, but it could have very different economic effects in some of the very rural areas in the state,” Horwitz said, according to the Journal. “Oregon took that into effect and adjusted their wage to address fears that a big-city minimum wage would destroy jobs in low-cost small towns.” (Agnes Constante/AJPress)
