Within a week of announcing agreement on a plan to raise the minimum wage to $15 per hour in California, the state Legislature approved Senate Bill 3, which steps the minimum wage from the current $10 level to $15 in 2022. California is the first state to approve the $15 minimum wage.
Gov. Edmund G. Brown Jr. signed the bill Monday, April 4, only a week after formally announcing that he, labor leaders and state legislators had agreed to the plan.
“This is about economic justice, it’s about people,” said Gov. Brown at the signing ceremony. “This is an important day. It’s not the end of the struggle but it’s a very important step forward.”
The Assembly passed the bill Thursday by a 48-26 vote, and five members did not vote. Idyllwild’s Assemblyman Brian Jones opposed the bill. Later that Thursday, the Senate also passed the bill on a 26-12 vote, with two members not voting. State Sen. Jeff Stone opposed the bill.
“While I applaud my colleagues for their desire to make sure working families have enough to live on, this bill will still have the fact of putting people out of work,” said Stone.
“Poverty is a real problem today in the state of California, but this bill that raises the so-called minimum wage just won’t fix that.”
SB 3’s sponsor, Sen. Mark Leno (D San Francisco), said in his press release, “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. 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.”
Stone argued that as wage costs rise, businesses, especially small businesses, will find ways to offset the costs. Technology will be found to reduce the need for labor. For example, more and more restaurants are using iPads to allow customers to order and pay for meals rather than servers coming to the table.
California’s minimum wage will go to $10.50 per hour next January and to $11 hourly in January 2018. Then, it will increase $1 per hour every year until Jan. 1, 2022, for all businesses with 26 or more than employees.
For businesses with fewer than 26 employees, the schedule is delayed one year. For example, $10.50 per hour will be effective Jan. 1, 2018 and the $15 rate will be effective Jan. 1, 2023.
After January 2023, the state’s minimum wage will be indexed for inflation at a maximum of 3.5 percent each year.
Also, if the statewide job growth or retail sales weaken over a quarter, six months or a year time frame, the governor will have the ability to pause the next year’s increase for a year. A state budget deficit can also trigger a delay.
In September 2013, Brown signed legislation to raise the state minimum wage from $8 per hour to $10 effective Jan. 1, 2016. According to his press release, California has 7 million hourly workers and almost 30 percent earn the minimum wage.
Currently, the highest minimum wage in the U.S. is $10.50 for Washington, D.C. The only other state matching California’s $10 rate is Massachusetts. New York’s Gov. Andrew Cuomo signed legislation enacting a $15-per-hour wage just in New York City by 2018 and $12.50 in the rest of the state by 2020.
