Background | California state lawmakers and labor unions today (3.28.2016) announced they have reached an agreement to raise the states current $10 per hour minimum wage to $15 per hour in 2022. That will make it the highest minimum wage in the U.S. While not yet enacted, media reports indicate the state’s governor will sign the bill into law.
Year-by-Year Increases
| $10 | Now
| $10.50 | 2017
| $11 | 2018
| $12 | 2019
| $13 | 2020
| $14 | 2021
| $15 | 2022
Provision for small businesses
Businesses with 25 employees or less will have an extra year to raise their wages
Response to the announcement by small business organizations
California NFIB Director Tom Scott | “Small businesses in California are still struggling to cope with the 25 percent minimum wage hike over just the past two years. Proposing a 50 percent increase on top of that is reckless and ignores serious negative consequences including job loss and increased costs to job creators, senior citizens, and non-profits. It is especially troubling that this minimum wage deal was crafted behind closed doors with no public input or transparency. It is clear Sacramento is broken when sweeping proposals such as this are crafted in the dark and quickly moved through the Legislature, ignoring the voice of our 22,000 small business members and others.”
California Chamber of Commerce | Earlier in March, the board of the California Chamber of Commerce voted to oppose the minimum wage increase. “(It) will add to the cumulative costs already experienced by California employers including high personal income taxes, high sales tax rates, medical costs, workers’ compensation costs, litigation costs, energy costs, and water costs/restrictions.”
What are “off-ramps”?
The deal announced today includes “off-ramps” — pauses in the annual minimum wage hike in case of negative economic conditions, including negative job growth or retail sales.
The state’s governor can act by September 1 of each year to pause the next year’s wage increase if a budget deficit is forecasted of more than one percent of annual revenue.
States with highest minimum wages enacted
$15 | California* (2022)
$15 | Oregon (2022 in certain urban areas)
$11.50 | Washington DC (July, 2016)
$11 | Massachusetts (2017)
*Not yet enacted, but agreement announced
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