Capitol Alert

Jerry Brown: California minimum wage plan ‘careful and responsible’

Gov. Jerry Brown joined legislators and labor leaders Monday in Sacramento to announce a landmark agreement that would make California the first state in the nation to commit to raising the minimum wage to $15 per hour statewide.
Gov. Jerry Brown joined legislators and labor leaders Monday in Sacramento to announce a landmark agreement that would make California the first state in the nation to commit to raising the minimum wage to $15 per hour statewide. rbyer@sacbee.com

Gov. Jerry Brown, Democratic leaders and labor leaders Monday touted an agreement that would raise the minimum wage to $15 an hour by 2022, saying the pact should avert an expensive ballot fight this fall.

The state’s $10-an-hour minimum wage, already the highest in the country, would rise to $10.50 next Jan. 1 for businesses with 26 or more workers, with subsequent increases to $15 an hour by 2022 and then linked to inflation. California would be the first state to commit to a $15 an hour wage.

Employers with 25 or fewer workers would have more time to phase in the increase. The agreement also allows Brown and his successors to suspend increases during economic downturns or budget deficits.

“Once again California is showing we can do right by workers, we can advance the economy and we can do it through the legislative process,” said Brown, who earlier issuing a statement calling the legislation “careful and responsible.”

Lawmakers will begin considering the measure this week. Democrats have large legislative majorities, but several lawmakers interviewed Monday declined to commit themselves.

Leaving a private meeting of Assembly Democrats, Assemblyman Jim Cooper, D-Elk Grove, who co-chairs a bloc of business-friendly Democrats, said some lawmakers wanted more details before they took positions.

“It could affect a lot of people. It could affect nonprofits,” Cooper said. “There’s a lot of folks that have questions.”

This plan raises the minimum wage in a careful and responsible way and provides some flexibility if economic and budgetary conditions change.

Gov. Jerry Brown

Monday’s announcement came several days after the qualification of a November ballot measure that would raise the minimum wage to $11 an hour by 2017, and by $1 an hour each subsequent year until it reaches $15 per hour Jan. 1, 2021.

Similarly, another union is collecting signatures to qualify its own $15-an-hour initiative. Both measures come amid a nationwide labor-backed “Fight for 15” campaign.

Representatives of both unions – the Service Employees International Union United Healthcare Workers West and the SEIU state council – said they would drop their respective efforts if the Legislature passes the negotiated package. June 30 is the deadline to pull a measure from the fall ballot.

Joining Brown and others Monday was Holly Dias, a fast-food employee who has publicly advocated for a higher minimum wage and related causes like more predictable scheduling. She fought back tears as she described struggling to support her son before sharing an awkward hug with Brown.

Business groups swiftly unified in public opposition to the deal. The National Federation of Independent Business’ California branch slammed the deal as “reckless” in a press release, warning it would lead to job losses and worsen California’s business climate.

What can we do? If the governor wants it, the governor’s going to get it.

Bill Dombrowski, president of the California Retailers Association

Bill Dombrowski, president of the California Retailers Association, predicted a $15 minimum wage would force some employers to compensate for higher labor costs by curtailing hours or cutting employees. He said business organizations like his did not play a part in negotiations.

“It feels to me like it’s a done deal,” Dombrowski said. “What can we do? If the governor wants it, the governor’s going to get it.”

 

Pushing back on Brown’s assurance that California could pause wage increases in times of economic stress, California Business Roundtable president Rob Lapsley said elected officials would be hesitant to take such a potentially unpopular step.

“What governor is going to pull that trigger? The pressure is too great,” said Lapsley, whose organization has not formally taken a position on the deal.

Brown acknowledged business concerns but noted that the proposed ballot measures include no language to suspend increases in difficult financial times. “Given the fact there’s a more far-reaching $15 minimum wage on the ballot already that can be taken off if this measure passes, I think there will be very few businesspeople who lobby against this bill because it would just be cutting their own throat,” he said.

The agreement now moves to the Legislature, with the Assembly Appropriations Committee planning to take up the bill in committee Wednesday. Should it pass, it could be eligible for a floor vote as soon as Thursday.

As opposed to the more liberal Senate, the Assembly tends to be the house where business groups have more leverage to block or weaken legislation. After briefing members of his caucus on the deal, Assembly Speaker Anthony Rendon, D-Paramount, said the bill appeared to have a good chance of passing. Multiple moderate Democrats already committed to backing the deal, he said.

“At a quick glance, it looks as though there is significant support thus far,” Rendon said, though he did not have a thorough vote count and noted “there were a number of questions” about indexing for inflation, timing and the potential impact on nonprofit organizations.

In the Senate, the deal was met with caution from several Senate Democrats who did not support the legislative push for a minimum wage increase last year.

Sen. Steve Glazer, D-Orinda, would not comment on the details of the proposal until he had a chance to read the language himself, while Sen. Cathleen Galgiani, D-Manteca, said she wanted to review the specifics of the offramp provision before deciding whether it was something she could support.

But Sen. Mark Leno, D-San Francisco, author of the original minimum wage bill, said early response had come back very positive and he didn’t anticipate any roadblocks. “We know it’s never over till it’s over,” he said.

Alexei Koseff of The Bee Capitol Bureau contributed to this report.

Historic minimum wage plan

Here are some provisions of the deal to raise California’s minimum wage to $15 an hour by 2022:

  • Annual increases begin Jan. 1, 2017, for companies with 26 employees or more. For smaller firms, each step increase would trail by one year.
  • Inflation-indexed increases up to 3.5 percent annually begin Jan. 1, 2024.
  • The governor can delay a scheduled increase by one year if economic or budget criteria are met. Economic criteria include negative job and retail sales growth. A budget delay can be implemented twice if state budget deficits are forecast.
  • All delay options end after wage reaches $15 an hour.
  • Deal includes three annual sick days for in-home health workers by 2022.
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