Gov. Jerry Brown announced Monday that California has reached a “landmark deal” to increase the state’s minimum wage to $15 an hour by 2022, after lawmakers made a tentative agreement over the weekend. If approved by the state assembly, the deal will make California the first state in the nation to adopt a $15 minimum wage for all workers.
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Cities like Seattle and Los Angeles have already started phasing in minimum wages of $15 an hour, and other cities, counties, and states have passed laws raising pay for at least some workers, e.g. Massachusetts’ statewide wage hike for home healthcare workers.
Like previous minimum wage laws, California’s would increase pay over time, raising it from $10 an hour, the current minimum, to $10.50 an hour by 2017 and $15 an hour by 2022.
In a word: politics.
“[The deal] was reached after lawmakers were threatened with two union-sponsored initiatives that would have raised the minimum to $15 on faster timelines — one of which recently qualified for the Nov. 8 statewide ballot,” write Ruben Vives, Frank Shyong, and Victoria Kim at The Los Angeles Times. “Numerous statewide polls showed voters would approve such a hike, and Democratic presidential candidates Bernie Sanders and Hillary Clinton have both endorsed a union-led nationwide push for a $15 minimum wage.”
Steve Trossman, a spokesman for the Service Employees International Union-United Healthcare Workers West, told The New York Times that his organization would “take a careful look” at the law, if passed, and decide what to do about their ballot initiative.
Possible Effects on the Economy
Although Gov. Brown supported an earlier hike to $10 an hour, he hadn’t endorsed further increases, citing concern that higher wages would impact business.
“It’s hard to say what the consequences of that would be,” writes Jordan Weissmann at Slate. “While I doubt that California’s economy is going to suddenly crumble as the ghost of Ronald Reagan shakes his head in disbelief, I don’t think we should count out the possibility of unintended consequences either. The bulk of the research literature shows that, typically, minimum wage increases haven’t been much of a job killer. But as I’ve pointed out a number of times, the prior research tends to look at smaller hikes that don’t tell us much about what a law like the one California is contemplating would do.”
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