Barring a surprise sag in the state’s employment picture, California’s hourly minimum wage will increase as scheduled on Jan. 1.
The hourly wage is scheduled to go from $10.50 to $11 at workplaces with 26 or more employees and from $10 to $10.50 at smaller workplaces.
Last year’s legislation raising the minimum wage to $15 by 2023 also created a process to review the state’s budget and economic conditions each July before the next scheduled increase. The review, demanded by Gov. Jerry Brown and making its debut this month, is meant to detect looming economic downturns in time for officials to pause the next scheduled hike.
Senate Bill 3 included three ways, or “offramps,” the governor can take to suspend planned annual increases:
▪ If the state has a projected deficit of more than 1 percent of general fund revenue in the current fiscal year or either of the next two years.
▪ If sales tax revenue for the past 12 months is down from the year before.
▪ If job growth is negative for either the previous three months or six months.
Under the June budget package, California’s reserve fund will be in the black through 2019-2020. A projected deficit of $1.4 billion won’t emerge until 2020-21, outside the minimum wage bill’s review window.
Sales tax revenue for the last 12 months, meanwhile, has increased by about 3 percent, according to an unofficial tally by the state Department of Finance.
Jobs data is the last outstanding question. The data is due Friday.
Total seasonally adjusted nonfarm employment stood at 16,637,900 in December 2016. Employment increased to 16,697,500 in March, and May’s total was unchanged. If California’s job numbers held steady in June – and there has been no indication they haven’t – then the state stays on track for the January minimum wage bump.
Brown has until Sept. 1 to make a final determination.
2.2 million Estimated number of workers paid the minimum wage.
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