California Appropriations Committee Tables Minimum Wage Bill
Senate Bill 3, a controversial bill to increase California's minimum wage has failed to pass in the state legislature. SB 3 would have phased in a $3.00 per hour increase to the minimum wage rate and also would have imposed annual cost of living increases.
In 2013, AB 10 (Alejo) was signed into law and authorized a minimum wage increase of $9 an hour starting July 1, 2014. Under existing law, the rate is scheduled to increase to $10.00 per hour beginning on January 1, 2016. This increase will make California's minimum wage one of the two highest rates in the nation (with Massachusetts also increasing its minimum wage to $10.00 per hour starting on January 1, 2016). That status will be short-lived, because other states (including Massachusetts, Vermont, and Connecticut) are scheduled to subsequently implement minimum wage rates that exceed $10.00 per hour. A number of cities, including several in California (for example, Los Angeles, San Francisco, Oakland, San Jose, Emeryville, Sunnyvale, and Berkeley) have imposed local minimum wage ordinances that increase the rate above the state minimum.
Senate Bill 3
SB 3 increases California's minimum wage to $11 per hour starting January 1, 2016 and $13 per hour starting July 1, 2017. Beginning in January 1, 2019, the bill required the minimum wage to be increased annually based on inflation as measured by the California Consumer Price Index (CCPI).
Specifics of SB 3 include:
1) Requires, starting January 1, 2019, the minimum wage to be calculated annually by multiplying the minimum wage in effect on December 31 of the previous year by the percentage of inflation (as measured by the CCPI) that occurred during that year and adding that product to the minimum wage.
2) Requires the Division of Labor Standards and Enforcement (DLSE) to publicize the automatically adjusted minimum wage.
3) Prohibits the Industrial Welfare Commission from reducing the minimum wage but does not preclude the commission from increasing the minimum wage.
4) States that the minimum wage applies to all industries, including public and private employment.
Supporters of the bill acknowledged AB 10 was an important step in reducing the degree of poverty in California and that it has contributed to a national conversation about income inequality. However, advocates also feel that beginning in 2017, the AB 10 minimum wage will begin to lose ground to the Federal Poverty Level (FPL) because there is no COLA provided. Supporters maintain that under SB 3, families of three will be lifted out of poverty starting in 2016 and will rise to 127% of the FPL by 2017.
Opponents argue that SB 3 would overwhelm businesses that are already struggling with the current minimum wage increase under AB 10, which would result in job losses. Opponents contend that another increase in the minimum wage would negatively impact economic recovery either by limiting available jobs or creating further job losses.
On August 27, 2015, the California State Assembly's Appropriations Committee decided to hold the bill rather than advance it further through the legislature. According to a statement by the committee chair, the bill may return next year.
Questions about California's Minimum Wage?
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