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California Enacts Highest Statewide Minimum Wage In US

California Gov. Jerry Brown discusses proposed legislation to increase the state's minimum wage to $15 per hour by 2022, during a news conference in Sacramento, March 28, 2016.
Associated Press
California Gov. Jerry Brown discusses proposed legislation to increase the state's minimum wage to $15 per hour by 2022, during a news conference in Sacramento, March 28, 2016.

California Enacts Highest Statewide Minimum Wage In US
California Enacts Highest Statewide Minimum Wage In US GUEST: Peter Brownell, research director, Center on Policy Initiatives

Our top story Governor. Jerry Brown signed a new wage bill into law this morning. The law braces the states minimum wage incrementally to $15 an hour or 2022. Governor. Brown signed the law this morning in Los Angeles. This is an important day. It's not the end of the struggle but it is very important step forward. Lets keep it going. We're not stopping here. And that's not the end of the proposed minimum wage increases Sandy go voters will decide on a proposed boost to the city and wage on the June ballot. It would include[ Indiscernible ] $11.50 an hour by next year. Joining me is Peter Brown now he's research director for the Center on policy initiatives which has been advocating for an increase in the minimum wage and Peter welcome to show. It's a pleasure to be here, Maureen. [ Indiscernible ] with the for many business and economic Institute at point Loma Nazarene University. Flynn welcome to the program. Thank you Peter and Maureen. And Peter would you think will be the effect of raising the state minimum wage from $10-$15 over the next six years? While I think that is going to put significant additional chunk of change into the pockets of estimated over 5 million workers across the state are Cox that is money that is obviously critically important to those workers who you know, right now aren't very little and have economic needs at it's also going to be important to the state economy because due to those pressing economic needs those folks are going to turn it around and spend that money in the economy and help the economy continue to grow in the state. Peter, now that there is an increase in the statement will wage Woody think San Diego needs its own minimum wage increase? Wealth there are couple of issues around major I would be on the ballot in June. One is that it takes effect sooner, the reality is what has the city Council but the city Council passed in 2014 would have started raising wages in 2015, that's been on hold due to the referendum was funded by a number of the business interest that oppose the minimum wage so workers of the nickel have been waiting for a long time to get a raise in the minimum wage and once it passes into and once the election is certified they would see a bump to 1050 immediately, to 11 to 50 to 2017 so folks here at the cost of living is very high will start to see some of those gains immediately and able really depending on the size of the businesses that they work for, won't really be until 2019 or so that the statement will wage would be higher than the city minimum wage. Bellin what effect you see this increase in minimum wage having on the overall economy here in California? Will help some people but also will hurt others. It will definitely is Peter indicated very well help individuals who are over the track who are now possessing a job and continue to hold those jobs but it could help -- for small businesses that have to shut down because can afford to hire these workers. Pick her consumers to the extent that they are having to pay a higher trend -- wage it also could affect young people trying to get the first run in the letter. For instance in the UK they just implement it a significant increase in the minimum wage but they have different tiers of [ Indiscernible ] so there's different minimum wage [ Indiscernible ] able from 18 to 20 so that allows people with no experience to get their first run on the letter. Lynn is a fair to say that the data on the impact of minimum wage and what it does to perhaps shrink workforces and conclusive as Nick? It is inconclusive. There are a lot of different studies showing different results. In California it is clear that we will see some regions affected differently than others for instance in the Central Valley and [ Indiscernible ] of the state there will be more hardship more lost jobs because the impact on individual companies that hire minimum that they have to pay will be significant. Coastal areas will not be much of an impact at all and there could be some boost in buying power but the point of the matter is that someone has to pay for it. The increase in that minimum wage. And finally Peter do you think this date minimum wage hike will make it more difficult for that city minimum wage proposal to gain traction at the ballot box? Me, I think the challenge is obviously keeping peoples and the ball that there are two different measures. You know, the polling, part of the reason this was so successful, that this did happen at the state was because there was a potential state ballot initiative that was extremely popular in terms of the polling, our measure, measure ice also very popular so I think the challenge isn't really people support or not the just make sure people get out and go far enough down the ballot to make sure they are marking their preferences in terms of supporting measure I, I'm pretty confident that people will do that because the support has been so strong. I've been speaking with Peter Brunel on the center policy initiative [ Indiscernible ] thank you both very much. You're welcome, thank you.

Gov. Jerry Brown signed a bill into law Monday giving California the nation's highest statewide minimum wage of $15 an hour by 2022.

That and a similar effort in New York mark the most ambitious moves yet to close the national divide between rich and poor. Experts say other states may follow, given Congress' reluctance to act despite entreaties from President Barack Obama.

Republicans and business groups warn that the move could cost thousands of jobs, while a legislative analysis puts the ultimate cost to taxpayers at $3.6 billion a year in higher pay for government employees.

A $15 base wage will have "devastating impacts on small businesses in California," Tom Scott, executive director of the state branch of the National Federation of Independent Business, said in a statement. "Ignoring the voices and concerns of the vast majority of job creators in this state is deeply concerning and illustrates why many feel Sacramento is broken."

Democrats who control the Legislature approved the compromise legislation Thursday, days after the agreement was announced. The measure passed with no Republican support.

The bill will bump the state's $10 hourly minimum by 50 cents next year and to $11 in 2018.

Hourly $1 raises will then come every January until 2022, unless the governor imposes a delay during an economic recession. Businesses with 25 or fewer employees have an extra year to comply.

Wages will rise with inflation each year thereafter.

The Democratic governor negotiated the deal with labor unions to head off competing labor-backed ballot initiatives that would have imposed swifter increases with fewer safeguards.

About 2.2 million Californians now earn the minimum wage, but University of California, Irvine, economics professor David Neumark estimated the boost could cost 5 to 10 percent of low-skilled workers their jobs.

Brown has said California, with the world's eighth largest economy, can absorb the raises without the problems predicted by opponents.

California and Massachusetts currently have the highest statewide minimum wage at $10. Washington, D.C., stands at $10.50. Los Angeles, Seattle and other cities have recently approved $15 minimum wages, while Oregon officials plan to increase the minimum to $14.75 an hour in cities and $12.50 in rural areas by 2022.

New York's state budget includes gradually raising the $9 minimum wage to $15, starting in New York City in three years and phasing in at a lower level elsewhere. An eventual statewide increase to $15 would be tied to economic indicators like inflation.

Local reaction

Councilman Todd Gloria, who authored a ballot measure to raise San Diego's minimum wage and provide workers with five paid annual sick days, called the bill signing a "bold step" in the right direction.

"It's a strong signal that we get it, and that there are real families that are working very, very hard but not making ends meet," Gloria told City News Service. "This is an attempt to try and address that — we have more to do."

In a statement, San Diego Regional Chamber of Commerce President and CEO Jerry Sanders said businesses are still struggling because of the Jan. 1 increase to $10 an hour.

"Now, businesses are facing an additional five years of increased costs and we aren't providing real opportunities for sustained growth or prosperity," Sanders said.

"It's unrealistic to think that this dramatic legislation won't cause businesses, particularly small businesses, to consider cutting their employees' hours or letting them go," Sanders said. "Some may even have to close their doors."

He said the wage hike is part of a regulatory environment that makes it difficult to conduct business in California and is counterproductive for many of the families in need of solutions.

The wage hike will affect 5.6 million workers, or about one-third of the statewide workforce, officials said.

"Wages are not keeping pace with the cost of living in California. Income inequality continues to grow," said Assemblywoman Toni Atkins, D-San Diego. "This proposal will help millions of hard-working Californians while protecting taxpayers and small businesses if the economy experiences a downturn. We can be prudent and make sure workers are paid a reasonable, livable wage at the same time. It doesn't have to be a choice."

Corrected: October 6, 2022 at 5:49 PM PDT
City News Service contributed to this report.
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