Deal reached to raise California’s minimum wage to $15 an hour
A deal was reached on March 28th between state legislators, the governor, and labor leaders to raise California’s minimum wage to $15 an hour by 2022.
“It’s a matter of economic justice. It makes sense and will help our entire state do much better for its citizens,” said Gov. Jerry Brown (D-California). “This program of a $15 minimum wage will happen over time in a gradual way and there will be flexibility in the even that there’s a recession or a budgetary downfall as prescribed in the bill.”
The agreement called for the state legislature (with Democratic majorities in both houses) to pass a bill that would raise the state minimum wage from $10 an hour to $15 an hour over a six-year period.
For businesses with more than 26 or more employees, the wage increases would follow this schedule:
$10.50/hr beginning Jan. 1, 2017
$11/hr beginning Jan. 1, 2018
$12/hr beginning Jan. 1, 2019
$13/hr beginning Jan. 1, 2020
$14/hr beginning Jan. 1, 2021
$15/hr beginning Jan. 1, 2022
Business with fewer than 25 employees will follow the aforementioned schedule but with a one-year delay in implementation.
Under the terms of the deal, Brown or a future governor can pause the scheduled wage increase for one year under the following conditions known as “off-ramps”:
1) If the economy slows down and the statewide job growth is negative for the 3 to 6 month period before a scheduled increase;
2) If the retail sales receipts for the prior 12 months is negative;
3) Or if the state budget is projected to be in deficit; however, this justification can be exercised only twice.
After reaching $15 per hour, the minimum wage will be pegged to the national consumer price index (CPI) so that wages will be adjusted every year for inflation with a ceiling of 3.5% increase.
California Labor Federation president Kathryn Lybarger said indexing the minimum wage to the CPI will ensure that “most working families never have to wait decades for a raise again”.
California Senate President Pro Tem Kevin de Leon said the deal will help “raise the living standards” for an estimated 5.6 million Californians – or 32% of the state’s labor force – currently earning the minimum wage. Many of those minimum wage workers are child care providers, caregivers, janitors, maids, and food servers.
“In the wealthiest state in the wealthiest nation on Earth, no one – no one – who works full-time should be forced to live in poverty. Wages have stagnated for decades while consumer costs, corporate profits, and executive bonuses have skyrocketed,” said De Leon.
De Leon added that the wage increase will be good for California’s economy overall because it will stimulate “new demands for goods, services, and [help] businesses thrive.”
Holly Diaz, a mother who works at a Burger King, described the difficulties of raising a 5-year-old son and making ends meet while earning $10 an hour.
“The struggles are to the point where I have to choose [between] feeding me and my child, buying bus passes, paying rent, and it’s not fair,” said Diaz. “I love my job. Yes, I do. But I love my family more. And I should not have to struggle daily to support them.”
The deal was reached after a wage increase measure sponsored by the Service Employees International Union (SEIU) gained enough signatures to qualify for the November ballot.
The SEIU’s ballot measure would increase the minimum wage to $15 an hour within four years (by July 2020) without any “off-ramps” or pauses should the economy slows down during that period.
“SEIU’s state council is prepared to pull our measure off the street from gathering signatures [upon] the passage of this bill,” SEIU California president Laphonza Butler. “But we are going to continue to work to make sure that the initiative is positioned if the legislative leadership isn’t able to come to an agreement.”
Brown warned that business interests lobbying the legislature to kill the proposed $15 minimum wage increase would be “cutting their throat” given that the ballot measure proposes a more “far-reaching” and less flexible minimum wage increase.
If the bill passes the legislature, California would become the first state to adopt a $15 an hour minimum wage. Brown said he hopes California will set a good example for other states – and Congress – to follow when it comes to addressing income inequality.
“There’s no doubt in this country, the gap between the better off and those who struggle at the bottom of our economic world has grown bigger and bigger. And it is quite incredible that there are so much power, so much wealth, and yet so many people are struggling on $10 an hour and people out there in the rest of the world getting $7.25,” said Brown. “So I’m hoping what happens in California will not stay in California but spread all across the country.”