California continued on its path this week to being the first state to commit to raising the minimum wage to $15 per hour.
The State Assembly on Thursday passed a measure 48 to 26 to raise the pay incrementally over the next six years.
“With cities like Long Beach and Los Angeles already adopting similar policies, I applaud the governor’s proposal to raise the minimum wage steadily over time,” said 70th District State Assemblymember Patrick O’Donnell. “A statewide approach to raising the minimum wage delivers a level playing field for our local business community and ensures greater economic opportunity for the hard-working men and women of California.”
Gov. Jerry Brown had announced March 28 a proposal that would raise the wage to $10.50 per hour on Jan. 1, 2017 for businesses with 26 or more employees and then each year until reaching $15 per hour in 2022.
The plan also allows additional time for small businesses— those with 25 or fewer employees— to phase in the increases.
“California is proving once again that it can get things done and help people get ahead,” Brown said. “This plan raises the minimum wage in a careful and responsible way and provides some flexibility if economic and budgetary conditions change.”
Brown was joined at the announcement by: Senate President pro Tempore Kevin de León; California Labor Federation president Kathryn Lybarger; SEIU United Long Term Care Workers’ Union president Laphonza Butler; Burger King employee Holly Dias; Senator Mark Leno; California Labor and Workforce Development Agency secretary David Lanier; United Domestic Workers of America executive director Doug Moore; Teamsters Union International vice president Rome Aloise; and United Healthcare Workers West executive board member Georgette Bradford.
“I’m pleased that we have a deal in place that will raise living standards for millions of Californians, while also spurring new demand for goods and services and helping businesses thrive,” Senate President pro Tempore de León said during the announcement. “This will benefit 5.6 million workers, 32 percent of the statewide workforce. It’s not just a higher wage, it’s a smart wage. And it will be implemented in a way that protects our budget and remains sensitive to economic conditions.”
According to a press release from the governor’s office, the intention of the plan is to increase the minimum wage over time, consistent with economic expansion, while providing safety valves— known as “off-ramps” — to put a hold on wage increases if negative economic or budgetary conditions arise. The governor can act by Sept. 1 of each year to pause the next year’s increase for one year if there is a forecasted budget deficit of more than one percent of annual revenue or poor economic conditions, such as negative job growth and retail sales.
Once the minimum wage reaches $15 an hour for all businesses, wages could then be increased each year up to 3.5 percent (rounded to the nearest 10 cents) for inflation as measured by the national Consumer Price Index, according to the press release.
The plan also phases in sick leave for in-home supportive services workers beginning July 2018.
Although the plan purports to take into consideration the state’s small businesses, one organization representing those entities— the National Federation of Independent Business (NFIB)— took issue with that section of the proposal.
In a press release issued Monday with the subheading “Voice of small business ignored in secretive deal with labor union leadership,” NFIB stated that Brown and legislative leadership demonstrated “a disturbingly clear disregard for the voice of small businesses in California.”
“At his press event, Gov. Brown claimed he and legislative leadership listened to and considered the small business perspective in crafting this proposal,” said NFIB/CA State Executive Director Tom Scott. “NFIB has yet to hear from Gov. Brown, Senate Pro Tem de Leon or Speaker Rendon. It is concerning that, in the 21st century, we are witnessing dark, closed-door deals with no public input or transparency.”
Shortly after Brown’s announcement, Senator John Moorlach (R-Costa Mesa) issued a statement that called the plan “flawed” and an “economic competitiveness killer.”
“California has the nation’s highest poverty rate,” Moorlach wrote. “One reason is because California has been rated the worst place to grow a business for 11 years straight. Instead of adding more road blocks for businesses, we must, first develop an overall plan for economic competitiveness that will rebuild our economy. But, absent that blueprint, we have no way of knowing if this minimum wage hike will help or hurt workers and the job growth which California families need.”
Moorlach said that, although it was reported that Brown was “flanked by labor leaders,” the governor was more likely held hostage.
“Labor threatened an expensive November ballot measure making California’s minimum wage the nation’s highest,” the senator wrote. “Instead, they’ll push that proposal through the Legislature.”
Shortly after the Assembly’s passage of the measure on Thursday, Moorlach released another statement indicating that the consequences of the decision will be significant.
“Statistics consistently show that raising the minimum wage will eliminate entry-level jobs,” Moorlach said. “Many workers hoping this change will improve their finances will be sorely disappointed because their job may actually no longer exist.”
