The bill that would significantly increase the state’s minimum wage from $8.00 to $9.25 by 2016 and would link future increases to inflation passed through the committee despite oppositions from several business communities and other industry groups.
Under the new proposed bill, the state’s current basic pay would increase to $8.25 by January 2014 and will be raised every year by $0.50 until 2016. In addition, starting in 2017, the increase in minimum wage would be based on the state’s Consumer Price Index.
Opponents of the said bill, including the California Manufacturers and Technology Association and the National Federal of Independent Businesses, averred that the bill would only lead to unemployment. In fact, the California Chamber of Commerce included the proposed bill on its annual “job killer” list.
On the other hand, advocates of the bill believe that the minimum wage should be indeed raised to keep up with the spikes in the cost of living. Moreover, the legislative analysis also cited an economic study from the University of California, Berkeley, suggesting that there is no correlation between minimum wage increases and unemployment. Also, the analysis stressed out that Oregon tied its minimum wage to inflation indices in 2002 but until present the state has not yet claimed any adverse effects to businesses. At present, Oregon’s minimum wage is at $8.95.
However, opponents argued that California is far different from Oregon. They claimed that while Oregon has approximately 4 million people, California has about 38 million people.
So far, California ranks fifth among states with the highest minimum wage. Only eighteen states have a minimum wage above the standard federal level of $7.25-per-hour and ten of which provides for annual, inflation-based increases.
Fortunately for the Salinas’ legislator, Alejo, his advocacy is earning positive feedback and a Los Angeles labor lawyer is impressed with his strong determination to push through with his proposed bill. Many teen laborers would absolutely benefit from the minimum wage increase once it is legalized, he said.