Gov. Jerry Brown, casting a living wage as a moral imperative while questioning its economic rationale, signed legislation Monday raising California’s mandatory minimum to $15 an hour by 2022, acting within hours of a similar bill signing in New York.
The bill’s enactment comes one week after Brown, Democratic lawmakers and labor leaders announced an agreement on the wage increase, averting a brawl on the November ballot.
In adopting the measure, California joined New York as the first states in the nation to enact a plan to raise their statewide minimums to $15. New York Gov. Andrew Cuomo signed his state’s legislation and was cheered by labor unions at a rally moments before Brown spoke in California.
Brown, a fiscal moderate, had previously expressed reservations about a wage increase. But amid growing concern about income inequality in California and the national thrust of the labor-backed “Fight for 15” campaign, his hand was forced. Public opinion polls showed strong support for increasing the state’s mandatory minimum beyond its current $10.
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The compromise Brown offered lawmakers – then celebrated with a bill-signing in Los Angeles – includes a provision allowing the governor to postpone a wage increase in the event of an economic downturn. It replaces a ballot measure that, if passed, would have raised the minimum wage to $15 by 2021, a year faster.
Brown, traveling to the state’s largest media market to sign the landmark bill, remained hesitant about the economic effect of raising the minimum wage, saying, “Economically, minimum wages may not make sense.”
But he said work is “not just an economic equation,” calling labor “part of living in a moral community.”
“Morally and socially and politically, they (minimum wages) make every sense because it binds the community together and makes sure that parents can take care of their kids in a much more satisfactory way,” Brown said.
The wage measures in California and New York reverberated nationally. Democratic presidential candidate Hillary Clinton appeared with Cuomo at a rally in his state, while her rival Bernie Sanders, said in a prepared statement that he was “proud that today two of our largest states will be increasing the minimum wage to a living wage of $15 an hour.”
The California legislation will raise the statewide minimum to $10.50 on Jan. 1 for businesses with 26 or more workers, the first of several incremental increases to $15, with future raises tied to inflation. Smaller businesses will have an additional year to phase in each increase.
The law follows measures in Los Angeles and San Francisco, among other cities, to gradually raise their own minimum wages to $15. It is expected to affect millions of low-wage workers and businesses that employ them, especially in the state’s agriculture, restaurant and retail industries. Some 6 million Californians currently earn the minimum wage.
By 2022, a full-time minimum-wage worker would see annual earnings increase to $30,000 from $20,000 today.
Senate President Pro Tem Kevin de León cast the legislation Monday as a recognition of “the contributions of hard-working men and women” throughout the state.
“No one who works full time should live in poverty,” he said.
In a concession to the state’s influential labor unions, the bill will also provide in-home health aides three annual sick days.
The Democratic-controlled Legislature passed the measure quickly last week, and on partisan lines. While labor unions and their Democratic allies celebrated the bill’s passage, no Republican supported it in either house.
Republicans and business groups said rising wages will force employers to increase prices or to cut costs by laying off workers or reducing their hours.
Research on the economic effect of a minimum wage increase is mixed, with findings ranging from little or no impact on employment rates, on one hand, to rising unemployment, on the other.
The measure will not come without a cost. According to the state Department of Finance, a $15 minimum would cost California about $4 billion a year.