This story first appeared in Restaurant Hospitality's sister publication Nation's Restaurant News.
As expected, California lawmakers on Thursday approved a pre-announced plan to raise the state’s minimum wage to $15 per hour by 2022, sending the bill to the governor’s desk.
Gov. Jerry Brown, who earlier this week outlined a landmark deal between lawmakers and labor groups pushing for the wage hike, is reportedly expected to sign the bill on April 4.
California isn’t the only state planning a $15 minimum wage. Lawmakers in New York announced an agreement that would move that state’s minimum toward $15.
Under the deal, part of a budget agreement worked out by Gov. Andrew Cuomo and state legislative leaders, large employers in New York City would be required to pay $15 an hour by Dec. 31, 2018. Small employers in that city would have another year to reach that level. In each case, the minimum would increase gradually beginning by the end of this year.
Three counties near New York City would have their minimum wage gradually increased until it reaches $15 by the end of 2021. And the rest of the state would pay a gradually increased minimum wage until it reaches $12.50 at the end of 2020, after which it would increase to $15 on a schedule set by the state.
The deal also includes an annual analysis of the economy in each region after 2019 to gauge the impact of the higher minimum wage on the economy in each region.
In California, the bill swept through the state Assembly in the morning with a 48 to 26 vote, mostly along party lines, according to the Sacramento Bee. It then moved to the Senate where it was approved with a vote of 26 to 12.
One Democrat, Assembly member Adam Gray from Merced, Calif., expressed opposition to the bill, saying in a statement that the plan will automatically spend multi-billions of dollars every year out of the state’s general fund. In addition, he said it will hurt those in his Central California district who have been unable to find work.
“We live in a part of the state where people want to work, to earn an honest day’s wages, and simply cannot find a job,” he said. “We do not have the Fortune 500 companies in the Central Valley. We have small businesses, family farms and so many hardworking Californians striving for a better life. And when the rents and the cost of living begin to reflect those in the big cities, my constituents will have no choice but to uproot their families and leave.”
Industry groups earlier this week also opposed the move, calling it too much, too soon and a job killer.
The California Consumers Against Higher Prices Committee, co-chaired by Jot Condie, president and CEO of the California Restaurant Association, called the deal overreaching and predicted it would have a devastating impact on small business.
Lawmakers like Senate president pro tempore Kevin de Leon, however, said the wage hike would restore the American dream for thousands of working families in California.
“In the wealthiest state in the wealthiest nation on earth, no one who works full time should be forced to live in poverty,” he said when the deal was announced on Monday.
Under the plan, California’s minimum wage would move from the current $10 per hour to $10.50 in January 2017, then to $11 in 2018, moving up by $1 per hour each year until it reaches $15 per hour. Businesses with 25 employees or fewer would be allowed an extra year to comply.
At that point, the wage would be tied to inflation. The plan, however, gives the governor a “pause” option to put a hold on the increase in the event of budgetary or economic downturn.
About 2.2 million workers in California are paid the minimum wage currently.
The annual income for a full-time worker at the current $10 per hour rate is about $20,800 — below the federal poverty level of $24,300 for a family of four.
Under the plan, in 2022 that same worker in California will earn $31,200 annually, according to Brown’s plan.
Brown said on Monday he hoped California’s adoption of a $15 per hour minimum wage would spur on other states across the country to lift wages, which he contends is a matter of “economic justice.”
The U.S. Congress “doesn’t get it,” he said. “They can’t even get to $7.50.
“California is the first state to get this done,” he said. “There’s no doubt in this country the gap between the better off and those who struggle at the bottom of this economic world has grown bigger and bigger. It’s incredible that there’s so much power and so much wealth and so many people out there struggling.”
Jonathan Maze contributed to this story.