WATSONVILLE — Gov. Jerry Brown on Wednesday signed legislation that will raise minimum wage in California to $10 an hour in three years, making the state’s entry-level workers among the nation’s highest paid.
Assembly Bill 10, authored by Assemblyman Luis Alejo, D-Salinas, will raise the minimum wage from $8 to $9 per hour as of July 2014, then to $10 by January 2016.
“With over 60 percent of our minimum wage workers 26-years-old or older, we have created a system where we pay workers less but need them to spend more,” Alejo stated in a press release. “That causes middle class families to fall down the economic ladder. It’s the reason our middle class is shrinking and the reason we are facing the largest gap between upper- and lower-income Californians in at least 30 years. That’s why this bill is supported by teachers, nurses, firefighters and thousands of others in public service.”
According to Alejo, the wage gap is largely due to the fact that Congress has only increased the Federal minimum wage three times in the last 30 years, falling well behind the rate of inflation.
This is despite a U.S. population that overwhelmingly supports raising workers’ wages, Alejo said, pointing to a poll that showed that 73 percent of likely voters would approve similar legislation.
“This year in his State of the Union address, President Obama called for a raise in the minimum wage as one way to build new ladders of opportunity into the middle class, but even with widespread support, Congress has not raised the minimum wage,” Alejo stated. “Once again, California is leading the effort to rebuild our middle class.”
Cesar Lara, executive director of the Monterey Bay Central Labor Council, called the new law a “positive step forward.”
The larger issue, he said, is that the cost of living here is a burden for most residents.
“Living here takes a lot more than $10 (an hour),” he said. “It’s not a livable wage, and that’s what this community needs to work towards.”
Lara said the increases will bring workers a step closer to being able to provide for their families.
“This will help workers at least bring a little more home,” he said. “It takes a lot of money to survive here.”
In addition, the extra money will also help low wage earners afford health insurance as the Affordable Health Care Act — a plan commonly referred to as Obamacare — is implemented.
Tila Guerrero, who owns two McDonalds restaurants in Watsonville, said it’s difficult to predict the effects of the minimum wage increase, particularly when coupled with increases to the costs of food.
“It will be a challenge to keep things proportional,” she said. “We will have to make it work.”
Dick Peixoto, who owns Lakeside Organic Gardens, said he pays his employees more than minimum wage.
But the law could make it difficult for smaller businesses and farmers just starting out in the industry, he said.
“It could mean a difference between for him being around a year later or not,” Peixoto said. “If people have to adjust to paying the $9, the $10 could finish them off,” he said.
The law has been blasted by Republican lawmakers and by some employers, and it has made the California Chamber of Commerce list of “job killers.”
That organization said that the increase will hinder economic recovery and stymie efforts to reduce unemployment.
“California businesses are already struggling with significant cost increases over the next three years, including tax increases from Proposition 30, higher energy costs, higher employment assessments from the Department of Industrial Relations, and costs related to the implementation of the federal Patient Protection and Affordable Care Act,” the organization stated in a press release. “These are only the costs the CalChamber knows about now — there will undoubtedly be more costs facing employers over the next three years.”
Angie Pappas, a spokeswoman for the California Restaurant Association, said that the organization has been getting numerous calls from restaurant owners concerned that the legislation is coming at the same time as Obamacare is being implemented.
“The minimum wage increase is too much too fast,” she said. “There is some fear about how they will be able to keep their staff and keep their businesses open.”
But according to Alejo, a study co-authored by economic professors at the University of California at Berkeley, the University of Massachusetts, and the University of North Carolina shows that raising the minimum wage does not eliminate low-paying jobs in either the short- or long-term.
“I’m proud to author this measure on behalf of hard working families in California,” continues Alejo. “The time is right.”
The State Senate approved AB 10 with a vote of 26-11 and the State Assembly approved AB 10 with a vote of 51-25.
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