California Poised to Raise Minimum Wage to $10 an Hour
SACRAMENTO, Calif. — California's minimum wage would rise to $10 an hour within three years under a bill that is all but certain to head to Gov. Jerry Brown on Thursday, giving the state one of the highest rates in the nation.
Washington state currently has the top minimum wage at $9.19 an hour, an amount that is pegged to rise with inflation. Some cities, including San Francisco, have slightly higher minimum wages.
The state Senate approved AB10 on a party-line 26-11 vote, sending it to the Assembly for a final vote that will be a mere formality before it goes to the governor. Brown indicated earlier this week that he would sign the bill, calling it an overdue piece of legislation that would help working-class families.
The bill would gradually raise California's minimum wage from the current $8 an hour to $10 by 2016.
It would be the first increase in the state's minimum wage in six years and comes amid a national debate over whether it is fair to pay fast-food workers, retail clerks and others wages so low that they often have to work second or third jobs.
Democrats said the bill by Assemblyman Luis Alejo, D-Watsonville, would help workers left behind during the recent recession. The California Chamber of Commerce fears it would drive up businesses' costs by ratcheting up other wages and workers' compensation payments.
"We have it tagged as a job killer, given the increased costs businesses will be faced with," Jennifer Barrera, an advocate for the chamber, said before the vote.
The bill generated a detailed, statistic-laced, 40-minute debate in the Senate.
"If you give people a couple more dollars an hour ... to spend in their communities, spend it they will. They're not going to put it into a hedge fund," said Sen. Marty Block, D-San Diego.
He added that, "Nothing will make small businesses happier. This will stimulate the economy, as well as helping people's lives."
But Republican lawmakers said it would harm the economy, price low-skilled workers out of the market and encourage businesses to cut jobs and automate.
"This is a classic example with how out of touch state leaders are," said Sen. Jim Nielsen, R-Gerber.
Sen. Ted Gaines, R-Rocklin, said liberals want to raise the cost of tobacco to discourage its use without realizing the same principle applies to labor: "If you make something more expensive, people will buy less of it."
Democrats who make up the majority of the Legislature called the wage hike a matter of economic justice.
"The American Dream is clearly fading fast," said Sen. Mark Leno, D-San Francisco. "The income disparity in this country has not been this severe since 1917."
If it becomes law, California would gradually overtake Washington state. Neighboring Oregon and Nevada also have higher basic wages.
Federal law sets a minimum wage of $7.25 per hour, but California is among 19 states and the District of Columbia that set a higher state minimum wage.
The federal minimum provides $15,080 a year assuming 40-hour work week, which is $50 below the federal poverty line for a family of two. More than 15 million workers nationally earn the national minimum, which compares compared to the median national salary of $40,350, according to the Bureau of Labor Statistics.
President Barack Obama has sought an increase of the federal minimum wage to $9 an hour.
San Francisco currently has the nation's highest minimum wage at $10.50 an hour.
California's minimum wage would increase to $9 an hour next July 1, and to $10 on Jan. 1, 2016.
A $10 minimum wage would increase earnings for a projected two million Californians by $4,000 a year and put $2.6 billion into the economy, Assembly Speaker John Perez, D-Los Angeles, estimated in a statement supporting the increase.
Opponents say businesses would suffer because owners also face voter-approved increases in sales and income taxes, and because of the uncertain costs of the federal Affordable Care Act.
Businesses are likely to cut jobs, increase consumer prices or both, they argue, citing a study by the National Federation of Independent Business. The group projects that mean the loss of between 46,000 and 68,000 jobs by 2023, depending on other factors including inflation.