LOS ANGELES (CBSLA.com/AP) — California has enacted the nation’s highest statewide minimum wage of $15 an hour to take effect by 2022.
Gov. Jerry Brown’s signing of the bill Monday in Los Angeles, and a similar New York effort, mark the most ambitious moves yet to close the national divide between rich and poor.
Business groups fear the increase will cost thousands of jobs.
Democratic lawmakers approved the measure last week with no Republican support.
Republicans and business groups warn that the move could cost thousands of jobs, while a legislative analysis puts the ultimate cost to taxpayers at $3.6 billion a year in higher pay for government employees.
The Democratic governor negotiated the deal to head off competing labor-backed ballot initiatives.
Brown says the most populous state’s fast-growing economy can absorb the raises.
A $15 base wage will have “devastating impacts on small businesses in California,” Tom Scott, executive director of the state branch of the National Federation of Independent Business, said in a statement. “Ignoring the voices and concerns of the vast majority of job creators in this state is deeply concerning and illustrates why many feel Sacramento is broken.”
The bill will bump the state’s $10 hourly minimum by 50 cents next year and to $11 in 2018.
Hourly $1 raises will then come every January until 2022, unless the governor imposes a delay during an economic recession. Businesses with 25 or fewer employees will have an extra year to comply.
Wages will rise with inflation each year thereafter.
“Today, California leads the nation once again, passing a historic minimum wage increase that will help lift millions of hardworking men and women out of poverty,” said Mayor Eric Garcetti. “Last year, I led efforts to raise the wage in Los Angeles, and we watched a wave of cities follow suit. We are fighting against income inequality with every tool we have.”
About 2.2 million Californians now earn the minimum wage, but University of California, Irvine, economics professor David Neumark estimated the boost could cost 5 to 10 percent of low-skilled workers their jobs.
Brown has said California, with the world’s eighth largest economy, can absorb the raises without the problems predicted by opponents.
California and Massachusetts currently have the highest statewide minimum wage at $10. Washington, D.C., stands at $10.50. Los Angeles, Seattle and other cities have recently approved $15 minimum wages, while Oregon officials plan to increase the minimum to $14.75 an hour in cities and $12.50 in rural areas by 2022.
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