Gov. Edmund G. Brown Jr. on Monday joined legislators and labor leaders to announce a landmark agreement that makes California the first state in the nation to commit to raising the minimum wage to $15 per hour statewide.
The governor 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 Diaz; Sen. 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.
“California is proving once again that it can get things done and help people get ahead,” said Brown. “This plan raises the minimum wage in a careful and responsible way and provides some flexibility, if economic and budgetary conditions change.”
Under the plan, the minimum wage will rise to $10.50 per hour on Jan. 1, 2017 for businesses with 25 or more employees, and then increase each year until reaching $15 per hour in 2022. This plan also recognizes the contributions of small businesses–those with fewer than 25 employees–to California’s economy and allows additional time for these employers to phase in the increases.
For small businesses, the wage rate will go up to $10.50 per hour on Jan. 1, 2018 and then increase $1 each year on Jan. 1 until 2023.
The purpose of the plan is to increase the minimum wage over time, consistent with economic expansion, while providing safety valves–known as “off-ramps”–to pause wage hikes, if negative economic or budgetary conditions emerge. The governor can act by Sept. 1 of each year to pause the next year’s wage increase for one year, if there is a forecasted budget deficit (of more than one percent of annual revenue) or poor economic conditions (negative job growth and retail sales).
Once the minimum wage reaches $15 per 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.
The plan also phases in sick leave for in-home supportive services workers starting in July 2018.
Brown signed AB 10 in September 2013 to raise California’s minimum wage 25 percent, from $8 to $10 per hour, which was effective Jan. 1. There are approximately 7 million hourly workers in California, of which about 2.2 million earn the minimum wage.
But not everyone is happy with the proposal. Sen. John Moorlach, R-Costa Mesa, voiced his opposition to the wage deal, saying the state’s “high “poverty rate” is due to the difficulty of operating a business in California.
“Instead of adding more road blocks for businesses, we must first, develop an overall plan for economic competitiveness that will rebuild our economy,” he said. “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.”
The move by Brown could result in a decision by the Service Employees International Union-United Healthcare Workers West (SEIU-UHW) to withdraw a minimum wage initiative it qualified for the Nov. 8 ballot.
The union has said it would withdrawal the initiative after the agreement is reviewed and ultimately becomes law.
According to SEIU-UHW, raising the minimum wage will help more than 3.3 million workers and their families, including 200,000 seniors, who do an honest day’s work but struggle to put food on the table. The union contends the increase will ensure workers like classroom aides, home health care workers, school janitors, and other hardworking people are paid enough to live on.
Raising the minimum wage also will help millions of children, many of whom go to bed hungry. Two million children live in poverty in California, more than any other state. And a higher minimum wage will particularly help women in California who make up more than half of minimum wage workers.
The union said more than 90 percent of workers affected by the proposed minimum wage increase are adults, 20 years old or older, and half are over 30. More than 30 percent have children.
A higher minimum wage also is good for California’s economy, said SEIU-UHW because workers will spend their increased earnings at local businesses, and it will reduce reliance on government programs like Medi-Cal.
The minimum wage proposal is the culmination of events that began 11 months ago when SEIU-UHW members filed a $15 minimum wage initiative and collected the necessary signatures to qualify it for the Nov. 8 ballot.
The state deal to raise the minimum wage follows the lead of Los Angeles City, and continues to put the pressure on national leaders to approve a hike to the federal minimum wage, according to Mayor Eric Garcetti.
“While Washington watches, cities and states act,” he said. “Gov. Brown, Speaker (Anthony) Rendon, President pro Tem de Leon and labor leaders across our state took decisive action to give more Californians a chance to join the middle class. City by city, state by state, we can confront the scourge of income inequality and make a difference in the lives of millions of families.”
Los Angeles city’s minimum wage is set to go up six months sooner than the state’s first planned increase — to $10.50 on July 1 and eventually reaching $15 per hour in 2020, with future increases pegged to the Consumer Price Inde (CPI).
The same wage hike schedule was also adopted for the unincorporated areas of Los Angeles County.
Other California cities have also enacted wage increases, some even earlier than Los Angeles. San Jose’s wage rose to $10.30 per hour in Jan. 1, 2015, and is set to continue climbing depending on the CPI.
San Francisco’s minimum hourly wage, now at $12.25, will go up to $13 on July 1 and to $15 in 2018, followed by further increases based on CPI, under a measure approved by that city’s voters in 2014.
From the perspective of the small Black owned businesses, the situation is a “no brainer” said Aubrey Stone, president and CEO of the California Black Chamber of Commerce. The goal is to keep costs down and generate the maximum of profit.
However, Stone adds that from the human standpoint, every man and woman should be making a decent salary to take care of their respective families.
Additionally he noted the sucess or failure of Black small businesses is not linked to how much they pay employees. Instead it is directly linked to how much business each company transacts. Stone says, they must simply do more business with each other and be at the table when deals are being made.
