California Minimum Wage to Increase in 2014

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Julia Frazer

Gov. Jerry Brown signed a bill on Wednesday, Sept. 25, that would increase California’s minimum wage to $10 an hour within the next three years.

The current minimum wage, $8 an hour, will be raised to $9 an hour on July 1, 2014, then to the final wage of $10 an hour on January 1, 2016. This bill, the first mandatory wage increase in nearly five years, comes as a welcome change for California workers.

Brown commented that the hourly increase would help to close the space between “workers at the bottom and those who occupy the commanding heights of the economy.”

Increase in the California minimum wage is forecasted to benefit at least 3 million workers in the state.

Census data analyzed by the Economic Policy Institute reveals that approximately 90 percent of the workers who will receive a raise are adults over the age of 20, and 81 percent have some college education.

Photo Courtesy of www.jerrybrown.org

Those who opposed the bill, including Republicans and business owners, declared that raising the hourly minimum could drive up business costs unmanageably.

“Small business owners will now be forced to make tough choices including reducing employee hours, cutting positions entirely, and for many, closing their doors altogether,” said John Kabateck, executive director of California’s branch of the National Federation of Independent Business.

Since its conception in 1938 at $0.16 an hour, the minimum wage increased with inflation until reaching its height in 1968. According to the Bureau of Labor Statistics’ Consumer price Index inflation calculator, the 1968 minimum wage of $1.60 an hour would be $10.56 today.

This recent bill does not contain provisions to proportionally increase the minimum wage with inflation. Instead, further action by California Legislature must be taken to increase the hourly wage.

In the coming years, several other states, including Alaska, Idaho, Maryland, Massachusetts, Minnesota, Illinois, and South Dakota plan to follow California’s actions and raise their minimum wage.

Photo Courtesy of http://ag.ca.gov/about.php

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