California governor set to approve highest minimum wage
SACRAMENTO, Calif. (AP) - California's governor is setting in motion the most populous state's climb toward the nation's highest statewide minimum wage of $15 an hour to take effect by 2022.
Gov. Jerry Brown's bill signing on Monday, 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.
"I'm hoping that what happens in California will not stay in California but spread all across the country," the Democratic governor said last week as he announced his agreement with labor leaders.
But 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. SB3 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 will have an extra year to comply.
Wages will rise with inflation each year thereafter.
Brown 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.