In April of this year, California Gov. Jerry Brown signed into a law a minimum wage plan he called ‘careful and responsible.’ Under the bill drafted by the Legislature and supported by labor unions, California’s minimum wage would rise to $10.50 an hour on Jan. 1, 2017, for businesses with 26 or more workers, with subsequent graduated increases topping out at $15 an hour by Jan. 1, 2022.
The bill Brown signed gives additional time to meet the new standard to businesses with fewer than 26 employees and also authorizes Brown and his successors to suspend increases for one year during economic downturns or when there are budget deficits. Businesses with 25 or fewer employees would have until Jan. 1, 2018, to make the transition to $10.50.
Under the plan, the California minimum wage for businesses with 26 or more employees would rise to $11 per hour in 2018, with subsequent $1.00-per-hour increases each January until Jan. 1, 2022. Businesses with 25 or fewer employees would have one additional year to mean each annual target.
Annual income of full time work at 2016 minimum wage in of $10 per hour would be $20,800; in 2022 at $15 per hour, it would be $31,200. For comparison, the Federal Poverty Level in 2016 for a family of four is $24,300.
By signing the Legislature’s bill in April, Brown averted a November ballot initiative that would have raised the minimum wage to $11 per hour in 2017 and $15 per hour by Jan. 1, 2021. Said Brown at the signing, “Once again California is showing we can do right by workers, we can advance the economy and we can do it through the legislative process in a careful and responsible way.”
Pushback against the wage increase came from businesses noting that it would lead to job losses and worsen California’s business comments. Commentators predicted more automated checkout lines and kiosks as employers could be forced to reduce staffing.
Brown, reputedly a fiscal moderate, expressed his own concerns about the $15-per-hour target at the Los Angeles signing. “Economically, minimum wages may not make sense,” said Brown. “But work is not just an economic equation,” noting that “labor is part of living in a moral community.”
The federal minimum wage is still $7.25, set at that level in 2009. Throughout the U.S. state minimum wage rates vary widely. But beginning Jan. 1, 2017, minimum wages will rise in 21 states, more than 20 cities and several counties and regions. The biggest increases, in percentage terms, will be in Arizona (up 24 percent to $10), in Maine (up 20 percent to $9) and in three Silicon Valley cities (up 20 percent to $12).