California to Raise Minimum Wage to $10 by 2016

PHOTO: A Carls Jr. employee gives a customer change through a drive-thru window in San Francisco

California workers may soon have the highest minimum wage levels in the country after a bill approving a raise from $8 to $10 within three years passed the state legislature.

The hike, to be implemented in two separate $1 increments, is the state's first in six years, and comes amid fast food industry strikes across the nation following a year-long campaign by unions and workers to raise federal wage floors to $15.

The bill, which eased through the state Senate 26 votes to 11 Thursday, and passed the Assembly a few hours later, 51-25, was backed by Democrats who said it would help workers pull through the effects of the recession and stimulate the economy by promoting spending among workers.

Gov. Jerry Brown called bill AB 10 an overdue piece of legislation that would help working class families, while Senator Bill Monning, D-Carmel, the bill's Senate floor manager, said raising the state's minimum wage level was "a moral imperative."

"It simply gives hardworking Californians the dignity and respect to provide for their families with their own hard-earned wages," said Assemblyman Luis Alejo, D-Watsonville, who brought the bill before his Assembly colleagues.

But Republican lawmakers opposed the bill, saying the 25 percent minimum wage increase would hurt business and cut jobs.

"This is a classic example with how out-of-touch state leaders are," said Sen. Jim Nielsen, R-Gerber.

Sen. Ted Gaines, R-Rocklin, compared raising tobacco costs to discourage smoking with the newly implemented wage standards, saying: "If you make something more expensive, people will buy less of it."

Industry associations have also opposed the bill.

The California Chamber of Commerce denounced it as "a job killer," while the California Restaurant Association said it was a "blow to small businesses" and a political knee-jerk move by the governor after it appeared that the issue had been shelved for the year.

"Brown suddenly became aggressively interested in addressing minimum wage with labor unions in an attempt to avoid their threat of putting the issue on the ballot in 2014," the CRA said on its website.

Although the federal minimum wage is currently set at $7.25 an hour, tipped employees often earn less than that. Under current federal requirements, employees are only obliged to be paid $2.13 an hour in direct wages if tips and commissions bridge the rest of gap.

More than 15 million American workers earn the national minimum wage, which calculated over a 40-hour, 52-week working year, equals $15,080. This figure sits $50 below the federal poverty line for a family of two and compares with a median national salary of $40,350.

Washington state currently heads the minimum wage leader board, mandating that workers be paid $9.19 an hour, while some cities, such as San Francisco ($10.50), boast even higher wages.

Under U.S. Department of Labor laws, when an employee is subject to both the federal and state wage laws, the employee is entitled to the provisions that provide the greater benefits.

California's minimum wage will be raised in two separate increments of $1, in July 2014 and again in January 2016, and it is not adjusted to inflation.

Unless further raises are approved by California lawmakers, other states like Washington that do index wages against inflation would gradually overtake California's miminum wage.

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