The Golden State is the first state in the nation to approve a statewide minimum wage as high as $15 — but not without sparking rigorous discussion.
Gov. Jerry Brown signed Senate Bill 3 on Monday, four days after the measure passed the State Assembly and State Senate. The new law will gradually raise the state’ minimum wage each year until it reaches $15 in 2022.
Brown said raising California’s minimum wage from $10 an hour is not just a calculated economic move, but action that speaks to the responsibility that comes with being a part of a moral community.
“Morally and socially and politically, they (minimum wages) make every sense because it binds the community together and makes sure that parents can take care of their kids in a much more satisfactory way,” he said.
The hike to a $15 minimum wage puts California on the forefront of a sweeping national movement to raise the income of the country’s lowest paid workers. In California, the legislation has its supporters and detractors.
The measure’s co-author, Sen. Mark Leno, said no one with full-time employment should live in poverty due to a low wage.
“SB 3 respects and rewards work, reduces turnover, and increases productivity and consumer spending, thereby stimulating economic growth while helping low-wage workers end their dependence on public assistance,” said the San Francisco Democrat. “The bill takes a thoughtful approach to raising the minimum wage by giving small businesses more time to adjust to higher wages and policy makers the flexibility to respond to economic uncertainties in our future.”
Sen. Isadore Hall said the people who will benefit from the $15 minimum wage are families that are struggling.
“These are not families that are putting away money for a rainy day fund. These are not families that are planning vacations to Europe,” said the Los Angeles Democrat and chair of the California Legislative Black Caucus. “I don’t look at this as a Republican issue. I don’t look at it as a Democratic issue. I look at it as a humanity issue. The folks in our communities, they are trying to buy groceries, they are trying to pay rent and utilities. The California Black Caucus, we support SB 3.”
The United Food and Commercial Workers (UFCW) Western States Council executive director Jim Araby said his organization, one of the bill’s many sponsors, is proud to stand with working families struggling to make ends meet on minimum wage.
“We join many who are fighting to end income inequality and put the working poor on a pathway to livable wages,” he said.
Employment Policies Institute research director Michael Saltsman, on the other hand, sees the new minimum wage increase differently. He predicts many businesses will have to cut staff or close because of the minimum wage increase.
“California may be the first state to pass a $15 minimum wage, but it will also be the first to find out why that’s a bad idea,” he said. “This pain from a $15 minimum wage will only be exacerbated in more troubled counties in the state.”
Although the bill passed the Assembly by a 48-26 vote and the Senate by 26-12, during a hearing in Sacramento some criticized the Governor and the labor leaders for working in secret in recent weeks to craft the agreement and rushing it through the Legislature. The bill, critics say, passed after only one committee hearing and with little to no public comment.
California Chamber of Commerce President Allen Zaremberg said SB 3 is too much, too fast.
“It is unfortunate the Legislature didn’t take advantage of the opportunity to address the issue in a more balanced manner,” he said.
Sen. Susan Eggman voted “yes” for the bill but questioned how quickly supporters thrust it in front of the two legislative bodies.
“How we got here doesn’t feel right,” said the Democrat from Stockton. “What’s the rush to do this?”
The Central Valley politician said small business owners that will have to pay the increasing floor wage should have been thought of more when the bill came together.
“I’m going to go back to my district…. and talk with my small business owners and hear from them after the fact how this impacts them. What we could have potentially done differently to make this a win, win, win, win for all of California,” she said.
California Business Roundtable President Rob Lapsley spoke out against the Governor signing the bill into law.
“Since the minimum wage is now indexed to grow each subsequent year, the impact to future state budgets will be even higher,” he said. “This legislation comes on top of increased legislation, regulations and policies that continue to make California one of the most expensive states in the nation to do business.”
The new legislation raises the state’s minimum wage to $10.50 per hour in January 2017 and $11 in January 2018. The state’s bottom wage would then increase an additional $1 per hour each year until reaching $15 in 2022. The bill allows the Governor to pause scheduled increases as the minimum wage climbs to $15 an hour if the state has an economic downturn or budget crisis.
SB 3 establishes annual increases capped at 3.5 percent based on the U.S. Consumer Price Index once California’s minimum wage reaches $15.The bill also delays wage increases for businesses with 25 or fewer employees. For those small companies, the first increase to $10.50 will begin in 2018. The new income floor of $15 an hour will be reached a year later in 2023 for them.
UC Berkeley’s Center for Labor Research and Education projects the ripple effect of the increase could boost wages for 5.6 million Californians by an average of 24 percent.
The research body said Latinos and workers in their 20s would benefit the most because they hold a disproportionate number of low-wage jobs. African Americans make up five percent of the workers that would benefit.
The Black Caucus chair Hall said in Black communities such as the Los Angeles area’s Compton and Watts neighborhoods, the first increase in the minimum wage hike next year is progress but still not enough money to afford renting a one-bedroom apartment.
“We have a fundamental responsibility to lift up as we climb,” Hall said. “We have a fundamental responsibility to make sure when we go back to our respective districts, we say we advocated and fought for the most vulnerable population in our community.”
