Minimum Wage Update
(Photo Credit: Associated Press)
Over the weekend, news broke of a deal between Governor Jerry Brown, labor and legislative leaders to incrementally raise the state’s minimum wage to $15 by 2022.
The news surprised many since the Governor had resisted a more modest hike to the already highest-in-the-nation minimum wage less than a year ago and warned that a wage hike to $15 would cost the state billions of dollars every year.
The reports were confirmed on Monday afternoon when the Governor held a press conference flanked by labor leaders (video of press conference), Assemblymember Mark Leno, and Senate President pro Tempore Kevin DeLeon.
The agreement includes an “off-ramp” provision that would allow the Governor to pause wage hikes in the event of economic downturn. The plan also provides an extra year for businesses with less than 25 employees to comply with raising wages.
The Governor called the agreement a “bold proposal” and that any groups who decide to oppose the agreement would be “cutting their own throat.”
Bold imagery for a deal that represents a compromise between a notoriously fiscally cautious Governor and labor unions who were optimistic that their even bolder proposals would score well with voters in November.
The New York Times weighed in on the “bold economic experiment” on Tuesday and raised concerns to how the wage increase would affect businesses in California’s lower-wage inland communities.
The issue is sure to be addressed this morning when the bill will face its first formal hearing in an increasingly moderate Assembly Democratic Caucus. Assembly Speaker Anthony Rendon was absent from the podium on Monday afternoon while he answered questions from his colleagues and began working on lining up the simple majority (41 votes) needed to pass the bill.
The votes will be easier to come by in the more liberal Senate.
Labor Unions indicated that they will pull their initiatives from the ballot if this agreement becomes law before the June 30 deadline to withdraw. A move that would free up millions in union resources for other priorities on the ballot (extended temporary taxes as one).
While the EBLC has not taken a position on the minimum wage hike, we do believe that this discussion was better suited for the legislature than the ballot box and hope that this important discussion is not rushed.
The Council will be watching closely this week since the Legislature could take action as soon as Thursday.
The upcoming quarterly meeting of the Business Task Force with elected representatives and chamber executives will be pivoting to discuss this proposal rather than the pro/con on the SEIU ballot measure as planned.
