California health workers want a $25 minimum wage. But hospitals say they can’t afford to pay
Union-backed California Democrats are once again pushing for a higher minimum wage for health care workers and support staffers – an effort that has drawn sharp criticism from hospitals, nursing homes, dialysis clinics and community health centers.
Sen. Maria Elena Durazo authored Senate Bill 525, which would require any “covered health care facility” to pay a minimum of $25 an hour to all workers on their premises, regardless of employer.
Beneficiaries would include nurses and caregivers, as well as housekeepers, security guards, groundskeepers, food preparers and even gift shop workers, so long as the services they provide directly or indirectly support patient care.
The bill’s supporters argue low wages and staff shortages prevent health care facilities from attracting and retaining workers. Raising pay would not only relieve current workers from financial stress, they say, but would also attract new employees to an industry that has suffered from burnout and turnover in the wake of the COVID-19 pandemic.
They pointed to a recent study from the UC Berkeley Labor Center that concluded more than 469,000 workers would benefit from such a wage boost, with an average increase of more than $5.74 an hour.
Opponents counter that a $25 minimum wage would further squeeze struggling clinics and force them to curb hours, cut positions and limit services to patients.
“Raising the minimum wage for all health care workers in the state is critical to help retain staff,” Durazo said in opening remarks to fellow members of the Senate Labor and Public Employment and Retirement Committee Wednesday morning. “Higher wages will help restore health care jobs to the status of a job in which a person can support a family.”
Durazo also pointed out the vast majority of health workers are women and people of color. Three-quarters of the state’s nursing, psychiatric and home health aides are people of color, according to the Employment Development Department, and almost 80% are women. In other health care support occupations, 70% are people of color and 84% are women.
“I have spent my entire life fighting to raise wages for working people,” Durazo said in her opening remarks at Wednesday’s hearing. “Poverty wages hurt everyone.”
The committee approved Durazo’s bill, with four votes in favor and only one against. Before voting, the members adopted a recommended amendment that clarified the minimum wage would not apply to delivery drivers who work onsite but are not employed by the health facility.
Health care workers testify about low wages
Turnout for the hearing was so large that the committee adjusted its rules to allow for three lead witness testimonies from both the supporters and opponents of the bill.
Hundreds of supporters represented by local chapters of the powerful Service Employees International Union California, a major sponsor of the bill, packed the hearing room and outside hall on Wednesday morning to show their support for the bill. SEIU California represents approximately 200,000 health care workers.
Myisha Chavis, a medical assistant at St. Francis Medical Center in Lynwood, testified first in support of the bill. In her pastel scrubs, the single mother approached the microphone and told the committee about how she struggles to afford rent and basic necessities on just $17 an hour.
“I was recently homeless with my two kids,” Chavis said, “I can’t even buy diapers and clothes for my kids.”
As her speaking time ticked down, Chavis paused, acknowledged her nervousness, and then asked the committee to put themselves in her shoes.
“I really hope and pray that you guys will help us, because it’s really hard,” she said. “I don’t want to leave my job. If I leave my job, I won’t be able to take care of my kids.”
Outside the hearing chamber, Mauricio Medina watched the proceedings on the video screen. The father of two works four different jobs, including as a CNA and a medical technician, at the Southern California Hospital at Hollywood. He’s an executive committee member with his union, SEIU-United Healthcare Workers West, which represents close to 100,000 health care workers in the state.
Medina said his shifts typically last 12 hours, but he often picks up an additional four hours due to understaffing. On his off days, he’ll use a health care gig work app called Medely to pick up contract shifts for other hospitals and clinics in need of extra help.
“I stay because I care for my patients,” Medina said. “Because if I don’t do it, then no one else will.”
For the past four years, Medina says he’s had to work through holidays like Christmas and Thanksgiving rather than spend them with his family. He hardly sees his two sons, 6-year-old Anthony and 7-year-old Matthew, since he usually comes home to eat, shower, sleep and then leave again for work.
“They spend more time playing with their dogs than playing with their father,” Medina said. “When they grow up, they’ll say one of two things about me – either I was a hard worker, or I didn’t care about them.”
Hospitals and care clinics worry about financial burden
Opponents of the bill raised concerns that a new wage floor would put financial stress on already cash-strapped hospitals and clinics.
“In the aftermath of the COVID-19 pandemic, health care providers in California are in dire financial straits,” the California Hospital Association expressed in written arguments to the committee. “SB 525’s added costs will force health providers to cut hours, positions and services.”
Representatives from community health centers, which primarily serve low-income and uninsured patients, told the committee that their funding structure essentially locks them into a “fixed income” and state-mandated wage increases aren’t an eligible reason for increasing their reimbursement rates. They say raising the minimum wage without increasing available funding could limit the services they’re able to provide.
“If, as the opponents suggest, they are limited in their ability to include state mandated wage increases as a reason for seeking a higher reimbursement rate, then there appears to be a problem,” wrote the committee’s staff analysts in their bill analysis.
Additional opponents include the California Chamber of Commerce and the California Nurses Association. The nurses union argued that most registered nurses in California make more than $25 an hour, and a wage floor of $25 could tempt employers to actually decrease pay during contract bargaining.
According to the latest available data from the EDD, in the first quarter of 2022, the median wage for registered nurses in California was $62.43 an hour.
Durazo pushed back against the notion that a wage floor would limit nurses’ earning potential.
“This is a minimum. This is the bottom wage, not the top,” Durazo said. “In my experience, when you lift the bottom, you lift the top.”
Sen. John Laird, D-Monterrey, questioned how financially distressed hospitals would stay afloat if the bill passed. He noted concerns from the community health centers who cited the recent closure of the Madera Community Hospital in late December.
“I just think there are certain parts of the system that might have a real problem with this,” Laird said, speaking to Durazo.
“There are some hospitals that survive this fine, and there are others that this would be a hit to,” he continued. “Is there a way that you’ve considered trying to address that in this bill in a way that doesn’t whack those hospitals that are in bankruptcy or on the edge?”
“I think many of our health care systems and hospitals should hire you to come in and help do an analysis to address these issues,” Durazo said in response to Laird’s question.
Laird indicated he would still vote to support the bill, but emphasized that Durazo’s bill would eventually need a secondary solution to help struggling facilities.
The committee passed SB 525 with aye votes from Durazo, Laird, Sen. Dave Cortese (D-Santa Clara), Sen. Lola Smallwood-Cuevas (D-Los Angeles). Sen. Scott Wilk (R-Santa Clarita) voted in opposition.
The bill will now move to the Senate Appropriations Committee for review.
This story was originally published April 13, 2023 at 5:00 AM.