California’s Minimum Wage Plan Sparks National Debate

On March 28, 2016, legislation to raise California’s minimum wage from $10 to $15 an hour by 2022 was approved by California’s governor, Jerry Brown. Presently at $10 an hour, the minimum wage in California is one of the highest in the nation. Only Washington, D.C., at $10.50 per hour, is higher. Consequently, the increase to $15 an hour would solidify it as the highest statewide minimum wage. According to worker group Fight for $15, this increase will elevate the wages of approximately 6.5 million California residents, 43% of the state’s workforce, who earn less than $15 an hour. The proposal has been sent to a statewide referendum, and it is now projected to be approved by the state assembly. Governor Brown says, “This plan raises the minimum wage in a careful and responsible way, and provides some flexibility if economic and budgetary conditions change.” Currently, about a dozen cities have approved the new legislation, including Los Angeles, San Francisco, and several other smaller cities in California.

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Photo credit: Mark Boster/Los Angeles Times.

California’s new minimum wage legislation is the outcome of a series of one-day strikes performed by low-wage Californian workers, who have campaigned for a $15 wage for the past three years. The strikes were not looked at seriously when they first began, yet they are now attributed with persuading lawmakers, as well as companies such as Facebook, Google, and Nationwide Insurance, to set $15 an hour as a base payment.

Other states have begun catching onto this idea as well. Oregon officials approved a law earlier this month that will increase that state’s minimum wage to nearly $15 in urban areas over the next six years. In New York, Governor Andrew Cuomo has proposed a $15 minimum for New York City starting in 2019, to be fully implemented by 2021. There are also many individual cities in the United States that have minimum wages that are higher than their state’s mandated minimum wage. Among them are Albuquerque, New Mexico; Louisville, Kentucky; and Emeryville, California. At $14.14 an hour, Emeryville’s minimum wage is currently the highest in the country. Paul Sonn, National Employment Law Project’s general counsel, predicts that increases to $15 in New York and California “clearly would create national momentum for other states to follow their lead, particularly Democratic-leaning coastal states.”

The movement for a higher minimum wage has even reached the national level. The Democratic Party has adopted a $15 minimum in its platform. Among the Democratic presidential candidates, Vermont Senator Bernie Sanders fully supports the increase, while Hillary Clinton is campaigning for a $12 minimum wage. The national minimum wage has been $7.25 since 2009 as a result of a series of increases set by the Fair Minimum Wage Act of 2007 created by former president George W. Bush.  In President Obama’s State of the Union address last year, he stated, “Of course, nothing helps families make ends meet like higher wages… If you truly believe you could work full-time and support a family on less than $15,000 a year, go try it. If not, vote to give millions of the hardest-working people in America a raise.” Obama, along with his fellow Democrats, argue that the minimum wage needs to be raised to support lower income families in an unsatisfactory economy. They also point out that the minimum wage in the U.S. is well below that of other advanced countries. For example, Australia’s minimum wage is $9.54, and Belgium’s minimum wage is $8.57.

On the other hand, Republicans take a completely different stance on this issue. Proposals to increase the federal minimum wage from $7.25 an hour to about $10 have been persistently blocked by Republicans in Congress. Republicans and other critics argue that state-level increases in minimum wages will inevitably force many businesses to substitute workers with technology and possibly even close in the face of rising production costs. 2016 Republican presidential candidate and US Senator Ted Cruz (TX), agrees with this viewpoint. He states, “The undeniable reality, the undeniable truth, is if the president succeeded in raising the minimum wage it would cost jobs for the most vulnerable. The people who have been hurt by this Obama economy would be hurt worse with the minimum wage proposal before this body.” Cruz backs his beliefs with a study from the nonpartisan Congressional Budget Office which explains that raising the minimum wage could cost a loss of 500,000 to 1 million jobs. Michael Saltsman, research director of the Employment Policies Institute, furthers Cruz’s opinion by adding, “California may be the first state to pass a $15 minimum wage, but it will also be the first to find out why that’s a bad idea.”Saltsman argues that many businesses will have to cut staff or close because of the deal. “This pain from a $15 minimum wage will only be exacerbated in more troubled counties in the states.”

The spread of proposals for higher minimum wages both statewide and nationwide have provoked an abundance of discussion about how raising the minimum wage will actually affect our nation. As states continue to explore the positives and negatives of raising wages, the public will have a more unequivocal answer to this complex question.

Featured image: Dan Holm / Shutterstock.com.

About the author

Kate Kinder is a junior at Collegiate