Governor Arnold
Schwarzenegger and
legislators have agreed to elevate the state’s minimum wage to $8.00 per hour
from the current $6.75 per hour. The increase will take effect in two stages: minimum
wage earners will get a 75 cent/hour boost on Jan. 1, 2007, to $7.50, and then
another 50 cent/hour raise on Jan. 1, 2008. The deal will give
wage in the nation when the $8 rate takes effect and is expected to impact over
a million Californians who earn minimum wages.
A Long Haul
The agreement comes
after months of wrangling between the governor and lawmakers, and after the governor
vetoed two minimum wage bills in preceding years. Leading up to the deal, Gov.
Schwarzenegger stated that he backed a $1 per hour increase, but balked at
legislation that would have raised the minimum wage to $7.75/hour along with
annual increases tied to inflation. To counter the legislative proposals, the
governor took the unusual step this year of reviving the dormant Industrial
Welfare Commission specifically for the purpose of considering a boost in the minimum
wage.
The agreement came after
Democrats in the legislature backed off demanding automatic cost-of-living adjustments
in exchange for a sweeter $1.25/hour jump.
The Impact
When the $8 rate takes
effect in 2008, minimum wage earners working full time will see a $2,600 increase
in their annual earnings. Some business leaders have expressed disappointment
with the raise, pointing out that it could cause employers to hold off on
hiring and to limit hours for current workers. But employee advocates hailed
the increase, and Assembly Speaker Fabian Nunez said it is “long overdue.”
A bill containing the
agreed-upon minimum wage provisions will now go to a vote in the legislature, where
it is expected to pass easily, and then on to Gov. Schwarzenegger. Note that
the deadline for the Assembly and Senate to pass bills is Aug. 31, and the governor
has until Sept. 30 to sign or veto them.
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