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Community Corner

Minimum Wage Bill Approved by Senate Committee

SACRAMENTO) — Assembly Bill 10 by Assemblymember Luis Alejo (D-Salinas), which raises California’s minimum wage to $10.00 by 2018, was approved on a 3-1 vote in the Senate Labor and Industrial Relations Committee today.

 

“AB 10 is about equity,” says Alejo.  “It provides modest increases over time to give our working poor a chance to pay their own bills without relying upon government assistance.  The bill has been amended to provide better certainty for employers by specifying the increases instead of implementing increases according to fluctuations in the marketplace.”

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Specifically as amended under AB 10, in 2014 the hourly minimum wage will increase 25 cents per hour to $8.25, which is a raise of $2.00 a day for a standard 8-hour work day.  In 2015, the minimum wage will increase to $8.75.  In 2016, the minimum wage will increase to $9.25.  In 2017, the minimum wage will increase to $9.50. In 2018, the minimum wage will increase to $10.00.

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“The COLA has been removed in order to provide certainty to business owners,” states Alejo.  “This bill clearly specifies the exact amount of each increase – as opposed to linking increases to fluctuations in the Consumer Price Index.”

 

“With over 60% of our minimum wage workers 26-years-old or older, we have created a system where we pay workers less but need them to spend more,” continues Alejo.  “That causes middle class families to fall down the economic ladder.  It’s the reason our middle class is shrinking and the reason we are facing the largest gap between upper- and lower-income Californians in at least 30 years.  That’s why this bill is supported by teachers, nurses, firefighters, and thousands of others in public service.”

 

The large wage gap is mostly due to the fact that Congress has only increased the minimum wage 3 times in the last 30 years.  However, a national poll conducted in February 2012 found that nearly three in four likely voters (73%) in the U.S. support increasing the minimum wage to $10 per hour. 

 

A National Employment Law Project report from last August found that the majority of jobs created during the economic recovery are low-wage jobs of less than $14 per hour.  During the same period of time, a California Budget Project study shows that one-third of all new income into California goes to our state’s top 1 percent.  In addition, the Census Bureau showed no significant change in income for our poorest workers whereas the top 1 percent saw their income grow by 6 percent in 2011.

 

Even with the amendments, opponents to the minimum wage contend that it is bad for business.  Ironically enough, Congress found that it was in the best interest of commerce when they established minimum wage during the Great Depression with the Fair Labor Standards Act of 1938.  “That’s because raising the minimum wage puts more money in the pockets of workers struggling to provide food, clothes, and housing for their families. And when minimum wage workers have more money, they spend it.  They just can’t afford to save it,” Alejo explains.

 

Raising the minimum wage causes a positive multiplier effect in local communities. In fact, according to a study co-authored by economic professors at the University of California at Berkeley, the University of Massachusetts, and the University of North Carolina, raising the minimum wage does not eliminate low-paying jobs in either the short- or long-term.

 

Approximately 64 percent of minimum wage workers are over the age of 26.  A study from the Center for Economic & Policy Research shows that today’s minimum wage workers are more likely to be better educated than they were in 1980.  These are workers with families, struggling to pay for rent and gas, and caring for their parents.

 

“Over the last three years, I have heard that the time is not right for one reason or another to give workers an opportunity to better care for their families by earning a better hourly wage.  But I argue that the time has never been better – or more important,” comments Alejo.  “Seventy-five years ago yesterday, President Franklin Roosevelt signed the Fair Labor Protections Act which included the creation of the minimum wage.  This year in his State of the Union address, President Obama called for a raise in the minimum wages one way to build new ladders of opportunity into the middle class.  The time is right.”

 

The bill will now be sent to the Senate Committee on Appropriations for consideration.

 

 

Luis Alejo represents the 30th District in the California State Assembly, which consists of the Salinas Valley, Monterey County, San Benito County, South Santa Clara County and the city of Watsonville in Santa Cruz County.

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