Lawmakers OK state-wide $15 minimum wage

The Legislature passed it, the governor said he’ll sign it, and so a $15-per-hour minimum wage is all but a done deal.

The measure, which raises the wage from $10 per hour incrementally until 2022 and 2023 (depending on the size of the business), was approved in both chambers of the Legislature on Thursday, and Democratic Gov. Jerry Brown issued a statement of support immediately after.

Both chambers debated the measure, with proponents and opponents presenting oft-cited arguments. CalWatchdog covered the battle lines in detail in February, when two union-backed initiatives were vying to make the November ballot.

Debating the policy

Proponents of the wage increase argue businesses will ultimately absorb much of the increased labor costs, workers will have more money to put back in the economy, and the increased wages will exceed inflation in terms of buying power.

Opponents argue the inflation will reduce the purchasing power of the dollar and offset the increase in pay. They also argue the minimum wage is meant to be introductory or temporary and a more effective solution is increased opportunity for advancement. Opponents argue smaller, seasonal and low profit-margin businesses (like restaurants) will be forced to cut jobs and invest in labor-saving technology while larger companies will flee the state looking for a friendlier business climate.

Politics

The measure actually stalled last year in the Legislature over concerns that the wage was increasing too much too soon. Earlier this year, Gov. Brown warned in his budget proposal that an increase to $15 per hour would raise the state’s labor expenses by $4 billion.

But when one of the two initiatives qualified for the ballot a little over a week ago, Brown cut a deal with the union leaders that slowed the increase ladder and added “off ramps” to pause increases in tough economic times. The deal was announced Monday.

Brown was in a bind, as the measure seemed sure to pass on the November ballot. Polling showed Californians were in favor of the increase, presidential-cycle turnouts are usually favorable to Democrats, who largely support the increase, and the success of Democratic presidential candidate, Sen. Bernie Sanders, I-Vt., who has campaigned heavily on an increase, showed his message was resonating with voters.

“The basic economic problems of a minimum wage haven’t gone away, but political considerations were too strong to resist,” said John J. Pitney, a Roy P. Crocker professor of politics at Claremont McKenna College.

Slow down

Prior to the vote, the left-leaning editorial board of the Los Angeles Times, which called Brown’s compromise “good,” urged lawmakers to slow down and consider all options, arguing that little is known about the impact of a 90 percent increase over a nine-year period (which includes two prior increases), floating a regional wage increase instead.

“Lawmakers are not doing their due diligence if they don’t take the time to analyze the alternatives to a blanket $15 minimum wage, or at least take steps to mitigate the potential impacts,” wrote the board.

Brown supports

After the bill passed, Gov. Brown repeated his comments from earlier in the week calling the deal “responsible” and “careful,” and said he’d sign the measure on Monday in Los Angeles.

“California is proving once again that it can get things done and help people get ahead,” Brown said in a statement. “This plan raises the minimum wage in a careful and responsible way and provides some flexibility if economic and budgetary conditions change.”

The first increase of 50 cents per hour goes into effect at the beginning of 2017.