ISSAlert April 6, 2016

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California and New York Enact $15 Minimum Wage

April 6, 2016                                                 Contact: Bill Balek

Earlier this week, California and New York both enacted legislation that would gradually push their statewide minimum wages to $15 an hour — the highest in the nation.

California.  In Los Angeles, Gov. Jerry Brown signed a bill into law that will lift the statewide minimum wage to $15 an hour by 2022.  California and New York are amongst the growing number of states and local governments that are raising minimum wages given Congress’ reluctance to act on the issue.  Insiders say that more states and local governments are likely to follow this trend.

The law will raise the state’s $10 hourly minimum by 50 cents next year and to $11 in 2018. Hourly $1 raises will then come every January until 2022, unless the governor imposes a delay during an economic recession.  Businesses with 25 or fewer employees have an extra year to comply.  Wages will rise with inflation each year thereafter.

Republicans and business groups have warned that the move could cost thousands of jobs, while a legislative analysis puts the cost to California taxpayers at $3.6 billion a year in higher pay for government employees alone.  About 2.2 million Californians now earn the minimum wage, but University of California, Irvine, economics professor David Neumark estimated the boost could cost 5 to 10 percent of low-skilled workers their jobs.

The Democratic governor negotiated the deal with labor unions to head off competing labor-backed ballot initiatives that would have imposed swifter increases with fewer safeguards.

New York State.  New York’s state budget includes gradually raising the $9 minimum wage to $15, starting in New York City in three years and phasing in at a lower level elsewhere. An eventual statewide increase to $15 would be tied to economic indicators such as inflation.

California and Massachusetts currently have the highest statewide minimum wage at $10. Washington, D.C., stands at $10.50. Los Angeles, Seattle and other cities have recently approved $15 minimum wages, while Oregon officials plan to increase the minimum to $14.75 an hour in cities and $12.50 in rural areas by 2022.