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SACRAMENTO, Calif. — After reaching what Gov. Jerry Brown is calling a "landmark" deal, California is on the verge of becoming the first state to hike its minimum wage to $15 an hour.
The increase still needs to be approved by the California State Assembly.
Brown outlined the details of the wage measure during a press conference Monday afternoon. He was joined by legislators and labor leaders from across the state.
"California is proving once again that it can get things done and help people get ahead," Brown said. "This plan raises the minimum wage in a careful and responsible way, and provides some flexibility if economic and budgetary conditions change."
Under the plan, the minimum wage will rise to $10.50 per hour on Jan. 1 for businesses with 25 or more employees, and then rise each year until reaching $15 per hour in 2022. Small businesses with fewer than 25 employees will have additional time to phase in the increases.
According to the governor's office, the purpose of the plan is to increase the minimum wage over time, consistent with economic expansion, while providing safety valves — known as off-ramp — to pause wage hikes if negative economic or budgetary conditions emerge.
Gov. Brown can act by Sept. 1 of each year to pause the next year's wage increase for one year if there is a forecasted budget deficit (of more than 1 percent of annual revenue) or poor economic conditions (negative job growth and retail sales).
Once the minimum wage reaches $15 per hour for all businesses, wages could then be increased each year up to 3.5 percent (rounded to the nearest 10 cents) for inflation, as measured by the national Consumer Price Index.
The call to raise the minimum wage to $15 an hour is being heard across the country. The federal minimum wage is currently $7.25 per hour. California's move would make the Golden State's minimum wage the highest in the United States. Its current $10 minimum wage is already one of the highest in the nation along with Massachusetts. Only Washington, D.C., at $10.50 per hour, is higher, The Associated Press reported.
Some states have passed higher minimums for government employees and state-contracted workers. Meanwhile, some cities including Seattle have already passed increases to $15 an hour. In addition, Oregon officials approved a law earlier this month that will increase that state's minimum wage to nearly $15 an hour in urban areas over the next six years, according to the news outlet.