Jerry Brown: Raising minimum wage moral, though ‘may not make sense’
Now that California’s minimum wage is on the road to 15 bucks per hour by 2022, let’s think about what that means for the state’s government employees and taxpayers:
Big bumps on the low end: Last year, 510 interns, student assistants, conservation corps workers and others made the hourly minimum wage (which went from $9 to $10 on July 1) or a few cents above it. Base pay for nearly 100 entry-level seasonal firefighters also started at the state’s minimum.
Those jobs will see pay gains that they would not have otherwise. Most state raises over the past decade, when there have been any, ranged from 1 percent to 3 percent annually. The law Brown signed will increase bottom-rung pay roughly 10 percent per year starting in January.
Union leverage: Shortly before Brown signed the California law on Monday, New York Gov. Andrew Cuomo signed a similar measure for his state. During the ensuing public celebration, New York state’s AFL-CIO President Mario Cilento said, “When we raise the floor in wages, we raise the ceiling. … Those of you making 16 or 17 or 18 dollars an hour, the next time your union goes in to negotiate, they’re going to ask for 19 and 20 and 21 dollars and up!”
That will certainly be the strategy for government unions in California, said J.J. Jelincic, a CalPERS board member and former state labor union president and negotiator.
“My experience is that when you raise the floor, it creates tremendous pressure for raises at least a few rungs up,” he said. About 12,000 state employees from custodians to office assistants earn $15 to $20 per hour.
$16.34 billionEstimated cost of California state civil-service salaries in 2014-15, before pension and other benefits
The firefighters union says the ripple effect of higher minimum wages should flow all the way up the ladder at Cal Fire. Otherwise, said union spokesman Terry McHale, the state risks “compaction,” which occurs when wages for jobs that carry less responsibility get too close or even overtake salaries for higher positions with more responsibility. When that occurs, the department struggles to recruit and promote employees because the pay doesn’t offset the added headache.
“Part of it is that firefighting is a paramilitary business,” McHale said. “Orders are given from the top down. You can’t have people at the bottom making more than people directing them to the fires.”
Higher cost: Raising pay increases cost to taxpayers. An internal Department of Finance memo provided to The Bee puts numbers to those expenses. The Jan. 1 increase from $10 to $10.50 per hour will hike the state civil service payroll by $6 million, the memo says.
That figure rises to $235 million in fiscal 2022-23 when the $15-per-hour minimum kicks in, the state estimates. (The figures exclude about $3 billion more in raises for locally run, state-subsidized, in-home health service workers as well as employees in the developmental services field.)
Job cuts? Brown opposed increasing the state minimum wage, in part because it would hike government’s cost. If higher wages are law, there’s just one way to hold costs: fewer wage earners.