California Lawmakers OK Highest Statewide Minimum Wage in U.S.

SACRAMENTO, Calif. (AP) — California lawmakers on Thursday approved the nation's highest statewide minimum wage of $15 an hour to take effect by 2022 after it was hailed by Democrats as an example to the nation as it struggles with a growing gap between rich and poor.

The legislation now goes to Gov. Jerry Brown, who says he will sign it into law Monday after previously working out the plan with labor unions.

Union workers staged a demonstration in support of a proposal to raise the California minimum wage to $15 by 2022 on March 31, 2016 in Oakland, California. (Photo by Justin Sullivan/Getty Images)

Brown says the measure approved by the Legislature proves again that California can get things done and help people get ahead.

The state of New York was considering a similar move.

The income divide has become a key issue across the U.S., with President Barack Obama proposing an increase to the federal minimum wage and the issue getting attention in the Democratic presidential primary.

Democrats who control both legislative chambers in California hailed the increase as a boon to more than 2 million of state's poorest workers.

Union workers staged a demonstration in support of a proposal to raise the California minimum wage to $15 by 2022 on March 31, 2016 in Oakland, California. (Photo by Justin Sullivan/Getty Images)

Republicans, however, echoed fears from business owners and economists that the annual increases — eventually tied to inflation — will compound California's image as hostile to business.

The Assembly passed SB3 with a 48-26 vote. The Senate followed, 26-12.

The increases would start with a boost from $10 to $10.50 on Jan. 1. Businesses with 25 or fewer employees would have an extra year to comply. Increases of $1 an hour would come every January until 2022. The governor could delay increases in times of budgetary or economic downturns.

California's current $10 an hour minimum wage is tied with Massachusetts for the highest among states. Only Washington, D.C., at $10.50 per hour is higher.

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.

In New York, Gov. Andrew Cuomo and state lawmakers continued to negotiate Thursday over Cuomo's proposal to gradually raise the state's minimum wage from $9 to $15 by the end of 2018 in New York City and by mid-2021 elsewhere in the state.

Brown, a Democrat, was previously reluctant to raise the base wage. He negotiated the deal with labor unions to head off competing labor-backed November ballot initiatives that would have imposed swifter increases without some of the safeguards included in the legislation. Brown now says the most populous state's fast-growing economy can absorb the raises without the problems predicted by opponents.

About 2.2 million Californians now earn the minimum wage. The University of California, Berkeley, Center for Labor Research and Education, projected the increase would have a ripple effect for those whose wages would increase to keep pace.

The researchers project it would increase pay for 5.6 million Californians by an average of 24 percent. More than a third of the affected workers are parents. Latinos would benefit most because they hold a disproportionate number of low-wage jobs, the researchers said.

The right-leaning American Action Forum countered with its own projection that the increases could cost nearly 700,000 jobs.

Union workers staged a demonstration in support of a proposal to raise the California minimum wage to $15 by 2022 on March 31, 2016 in Oakland, California. (Photo by Justin Sullivan/Getty Images)

The increases are projected to eventually cost California taxpayers an additional $3.6 billion annually for higher government employee pay.

Art Pulaski, executive secretary-treasurer of the California Labor Federation, hailed what he called a historic day for California and the country.

"California takes a massive leap forward today in the fight to rebalance our nation's economy," Pulaski said in a statement.

However, Allan Zaremberg, president of the California Chamber of Commerce, said the increase was being made too fast.

"It is unfortunate the Legislature didn't take advantage of the opportunity to address the issue in a more balanced manner," he said.

Some members of the Legislature cited the nation's imbalance in wealth while voting in favor of the wage increase.

"While we have made great strides in recovering from the economic recession, we know the bulk of that growth has been to the benefit of the top 1 or 2 percent," said Assemblyman Roger Hernandez, D-West Covina. "Too many workers are working full-time for poverty wages."

State Sen. Isadore Hall, D-Compton, said many workers are struggling to cover living expenses.

"They're trying to figure out a way to buy their children diapers," he said. "They're finding out a way to buy their children milk. Or how might they be able to pay their utility bills."

Assemblyman Jim Patterson, R-Fresno, countered that such a drastic increase would force small business owners to make layoffs "with tears in their eyes," ultimately resulting in less employment.

"Business owners are going to go, is this an April Fool's joke?" Sen. John Moorlach, R-Costa Mesa, added.

After the Assembly and Senate votes, dozens of supporters gathered on the lawn outside the Capitol for a labor-organized rally. Many waved signs saying "$15 California."

Krystine Wilson, 27, of Carmichael said the higher wage will help her avoid racking up late fees and payday loans when the $10 an hour she earns at a fast-food restaurant isn't enough.

"We have to decide whether or not we want to pay a certain utility bill, or do we want to pay the rent?" Wilson said. "We have to make that decision every month."

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