SACRAMENTO, Calif. (AP) — California and New York are poised to become the highest-paid minimum-wage states in the nation after governors for both reached deals with lawmakers to raise the lowest amount a worker can be paid to a record-shattering $15 an hour.
Gov. Jerry Brown said he will sign California’s new minimum-wage bill Monday in Los Angeles after it passed the Legislature on Thursday.
Across the country in New York, Gov. Andrew Cuomo reached a tentative deal late Thursday with his state’s top lawmakers to also raise his state’s minimum wage to $15.
The actions in two of the nation’s most labor-friendly states come as the income divide has become a key issue across the U.S. in this presidential election year. President Barack Obama, who first proposed an increase to the federal minimum wage in 2013, applauded the states’ actions and called on the Republican-controlled Congress to “keep up with the rest of the country.”
“California takes a massive leap forward today in the fight to rebalance our nation’s economy,” said Art Pulaski, executive secretary-treasurer of the California Labor Federation.
California’s current $10 an hour minimum wage is tied with Massachusetts for the highest among states. Only Washington, D.C., at $10.50 per hour is higher. New York’s minimum wage is $9.
Democrats who control both legislative chambers in California hailed the increase as a boon to more than 2 million workers. Brown, also a Democrat, said it proves the nation’s largest state can get things done and help people get ahead.
Republicans, however, echoed fears from business owners and economists that California’s annual increases — eventually tied to inflation — will compound the state’s image as hostile to business.
Assemblyman Jim Patterson, R-Fresno, said the increase would force small business owners to make layoffs “with tears in their eyes,” ultimately resulting in less employment.
The increases would start with a boost from $10 to $10.50 on Jan. 1. Businesses with 25 or fewer employees would have an extra year to comply. Increases of $1 an hour would come every January until 2022. The governor could delay increases in times of budgetary or economic downturns.
The tentative deal reached by New York officials Thursday would be phased in regionally in the nation’s fourth-largest state. It would also eventually affect more than 2 million workers.
In New York City, the wage would increase to $15 by the end of 2018, though businesses with fewer than 10 employees would get an extra year. In the New York City suburbs of Long Island and Westchester County, the wage would rise to $15 by the end of 2022. The increases are even more drawn out upstate, where the wage would hit $12.50 in 2021 and then increase to $15 based on an undetermined schedule.
“This minimum wage increase will be of national significance,” Cuomo, a Democrat, told reporters Thursday. “It’s raising the minimum wage in a way that’s responsible.”
Cuomo had initially proposed a simpler phase-in: three years in New York City and six years elsewhere. The more gradual, nuanced approach was the result of negotiations with Republicans in the state Senate who worried such a sharp increase would devastate businesses, particularly in the upstate region’s more fragile economy.
Brown was previously reluctant to raise California’s base wage. He negotiated the deal with labor unions to head off competing labor-backed November ballot initiatives that would have imposed swifter increases without some of the safeguards included in the legislation. Brown now says California’s fast-growing economy can absorb the raises without the problems predicted by opponents.
About 2.2 million Californians now earn the minimum wage. The University of California, Berkeley, Center for Labor Research and Education projected the increase would have a ripple effect for those whose wages would increase to keep pace.
The researchers project it would increase pay for 5.6 million Californians by an average of 24 percent. More than a third of the affected workers are parents. Latinos would benefit most because they hold a disproportionate number of low-wage jobs, the researchers said.
The right-leaning American Action Forum countered with its own projection that the increases could cost nearly 700,000 jobs.
The increases are projected to eventually cost California taxpayers an additional $3.6 billion annually for higher government employee pay.
The tentative deal New York officials reached also includes middle-class state income tax cuts starting in 2018. The cut would apply to New Yorkers with incomes between $40,000 and $300,000 and rates that currently range from 6.45 percent to 6.65 percent starting in 2018.
The rates would gradually drop to 5.5 percent by 2025.
Cuomo administration officials estimate the lower tax rates will save more than 4 million filers nearly $6.6 billion in the first four years, with annual savings reaching $4.2 billion by 2025.
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Associated Press writers Don Thompson in Sacramento and David Klepper and Michael Virtanen in Albany, N.Y., contributed to this report.
Copyright 2016 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.
After winning in New York and California, the Democratic party should take the $15 per hour campaign to some red or at least purple state and start pushing. I recommend Missouri. We need to see protests every night on the KC and St. Louis news stations. The Democratic party should be at the head of the movement. National party leaders should show up week after week. The party should focus on developing local leadership and using the red state effort as a training ground for party operatives.
I know what you are going to say, it won’t work in a red state, but how do you know the state will stay red unless you are willing to try to change it.
Will help but any system which does not give ample opportunity for talent to displace unearned rank will, in the end, come to grief. In any system talent exists in previously despised populations (black/yellow races, poor/working class). Over and over again it has been shown that an ordinary sampling of the population, including those considered inferior or hopeless, contains men and women of rare intelligence, wit, and ability. Just as a pond turns over its water yearly, revitalizing the pond’s life, so a good stirring of the human pond brings new blood to the top, and we’re all better for it. Our system, our society is in the throws of allowing the pond to scum over by allowing all the benefits and wealth to accumulate with a very few at the top. It’s like crystallization, spreading and freezing through society, making brittle what had been fluid. A $15.00 minimum wage helps to thaw, in a minor way, the spreading and freezing of the system. Prudence says we will all be better off if more of the same occurs and is encouraged.
Good on the State of California…
…since Oregon started the trend by raising the minimum wage to $14.75 by 2022, in February.
Man I bet their economies will go through the roof and the businesses that have to pay their works a decently will see their profit margins grow along with it.
watch Colorado… to the tune of a quarter million new residents in one year, they are already reaping unexpected and immediate benefits from their new recreational pot laws.
If they get real smart real fast and turn that bounty into a $15 minimum wage to spread all that new wealth around sooner than later, you will see a new age of prosperity up and down the front range that will make the Colorado gold rush look like chump change.
The actual tax revenue numbers are well beyond projections, but the residual results have been simply staggering, particularly the influx of young families seeking a gentler place in a hard world, with a thriving economy and a choice of opportunities.
Hard to imagine Colorado won’t follow suit somehow, especially considering it is this very working class that is generating their newfound abundance. Give them back a bigger share of that commonwealth they generate, and it can only benefit everyone. Like JFK said, a rising tide lifts all boats, even the luxury yachts… and in this case, especially those luxury yachts.
The luxury yacht owners should be the first to embrace this construct.