SACRAMENTO — California’s lowest-paid workers are in store for a 25 percent raise after lawmakers late Thursday boosted the Golden State’s minimum wage to the highest of any state in the country.
In the final hours of its 2013 regular session, the Legislature voted to hike the minimum wage from $8 an hour to $9 next July and $10 by January 2016 — a move Democrats praised as a boon to struggling workers and Republicans lambasted as a “job killer.”
Gov. Jerry Brown has already promised to sign the bill, making California a leader in a growing movement to increase wages for the working poor spurred by protesting fast-food workers across the country.
“The minimum wage has not kept pace with rising costs,”
Brown said Wednesday. “This legislation is overdue and will help families that are struggling in this harsh economy.”
The state Senate voted 26-11 on Thursday to pass Assembly Bill 10 by Assemblyman Luis Alejo, D-Salinas, and the Assembly followed suit by agreeing 51-25 to Senate amendments, sending the bill to Brown. The Assembly had passed an earlier version of the bill in May.
But Republican lawmakers and business groups excoriated the Democrats, saying they were placing California’s slow economic recovery at risk.
Noting that the bill would catapult California past Washington state, which now leads all states with a $9.19-per-hour minimum wage, Sen. Steve Knight, R-Antelope Valley, argued that if wages go too high, businesses will only automate more and industries will hirer fewer people who need work.
“Obviously there’s a tipping point,” he said. “We are still in a recession. … It’s tough to get a job out there.”
Minimum wages have been an incendiary topic near and far lately. San Jose voters last November approved raising the city’s minimum wage to $10, joining San Francisco as one of only a handful of cities nationwide with their own wage floors. And fast-food workers from coast-to-coast staged a one-day walkout in August to demand $15 an hour. And the mayor of Washington, D.C., on Thursday vetoed an increase to $12.50 that had been staunchly opposed by Walmart and other major retailers.
California lawmakers aimed to finish a full day early — the session technically ends at midnight Friday — so some members could get home for the Jewish holiday of Yom Kippur, which starts at sundown Friday.
The wage bill was one of several hotly contested bills that passed in the session’s final days. A “Domestic Worker Bill of Rights,” which would require that in-home workers be paid overtime rates, was also sent to the governor on Thursday.
Also sent to Brown’s desk this week were bills to regulate oil and gas fracking; to partially withdraw California from a federal immigration and deportation dragnet; and to enact a wide range of strict new gun controls. Among those that didn’t make the cut — but might come back next year — were bills to revoke tax-exempt status from groups such as the Boy Scouts that have anti-gay policies; to require background checks for ammunition purchases; and to require Californians to give up all high-capacity ammunition magazines no matter when they were bought.
State Sen. Bill Monning, D-Monterey, shepherded the minimum-wage bill on the Senate floor, saying it’s “fair and reasonable” and “brings our struggling workforce some much-needed relief.”
Economists are divided on the impact of minimum wage increases.
This year, a panel of about three-dozen experts from leading universities around the country was split when asked by the Initiative on Global Markets whether raising the federal minimum wage to $9 from its current $7.25 would reduce the number of low-wage jobs available.
In December 2010, a study by UC Berkeley economists concluded that raising the minimum wage does not cut the number of low-paying jobs. But not everyone agrees.
“I think the evidence is overwhelming that there is a job loss from these things,” said David Neumark, director of the UC Irvine Center for Economics and Public Policy, who’s studied minimum wage proposals. “It’s a badly targeted policy.”
Neumark said raising the minimum wage does not usually help poor families because so many low-wage workers are “secondary earners” — such as high-school students — and usually not the breadwinners.
David Hewitt, assistant professor of economics at Whittier College, agreed that while there may be fewer jobs available, putting extra cash in the hands of low-wage workers stimulates the economy.
“When they get extra money, they spend it,” Hewitt said. “They’re not likely to take this raise and put it in the bank or in an IRA. They’re going to buy their kids a toy or a schoolbook or buy some extra clothes.”
The California Restaurant Association, however, said the increase would be a “back-breaker.”
“Given the economics in our industry, where restaurants operate at very thin profit margins, a 25 percent increase in labor costs will result in fewer job opportunities for Californians looking to get back on their feet,” CEO Jot Condie said.
Jack Temple, a policy analyst with the National Employment Law Project, countered that when fast-food companies, retailers and others pay workers more, they should reduce staff turnover, which saves costly time and money training and hiring new staff.
“Despite what they say about what they will do,” he said, “historically employers have not reduced employment afterward.”
States with highest minimum wages
As California lawmakers moved to raise the state’s minimum wage from $8 to $10, here are the states with the highest minimum wages as of now:
District of Columbia: $8.25
The national minimum wage is $7.25; four states have minimum wages of less than that, and five states have no minimum wage.
Source: U.S. Department of Labor