California became the first state in the nation to move toward a $15 an hour minimum wage Thursday with state lawmakers approving the bill to increase the hourly rate over the next six years.
The Assembly passed SB3 with a 48-26 vote. The Senate followed, 26-12.
The process of raising the minimum wage will unfold over the next six years. It will begin in January 2017 with the state minimum wage rising to $10.50 per hour. The following year would see the wage rise to $11.00 an hour. Each year after would see it rise by $1, until reaching $15 in 2022. Businesses with 25 or fewer employees would have an extra year to comply.
The bill was passed by the Assembly 48-26 and the Senate by 26-12. The legislation goes to Gov. Jerry Brown for his signature on Monday. Brown has said he will sign the bill after previously working out the plan with labor unions.
Brown, a Democrat, was previously reluctant to raise the base wage. He negotiated the deal with labor unions to head off competing labor-backed November ballot initiatives that would have imposed swifter increases without some of the safeguards included in the legislation. Brown now says the most populous state's fast-growing economy can absorb the raises without the problems predicted by opponents.
About 2.2 million Californians now earn the minimum wage. The University of California, Berkeley, Center for Labor Research and Education, projected the increase would have a ripple effect for those whose wages would increase to keep pace.
The researchers project it would increase pay for 5.6 million Californians by an average of 24 percent. More than a third of the affected workers are parents. Latinos would benefit most because they hold a disproportionate number of low-wage jobs, the researchers said.
The right-leaning American Action Forum countered with its own projection that the increases could cost nearly 700,000 jobs.
The bill was resoundedly rejected by Republicans in both the Assembly and the Senate.
“I have deep concerns about how this bill will impact people and families in California — especially in the San Joaquin Valley, where unemployment rates remain high and job opportunities are often few and far between,” said Assemblymember Kristin Olsen (R-Riverbank). “Our communities will no doubt feel the negative ripple effects of this one-size-fits-all legislation much faster than those in coastal regions of the state.
“Instead, we should pass bills that encourage upward mobility, such as education reforms that will prepare California students for high-paying jobs, and ones that will encourage a wider range of industries to grow in all regions of our state,” Olsen continued. “A thoughtful minimum wage policy would recognize the differences in our state’s regional economies and living costs — and at the very least would require a post-implementation analysis of how people, families, and economies in all parts of the state are impacted.”
Assemblymember Adam Gray(D-Merced) was one of two Democrats to vote against the wage increase, stating it will have a negative impact on the Central Valley.
“Improving the lives of my constituents is my top priority, which is why I have supported previous increases to the state’s minimum wage as long as the increase did not contain an autopilot spending mechanism. Unfortunately, SB 3 contains an autopilot spending provision which will cost the General Fund at least $4 billion per year,” Gray said.
“This spending commitment is being made at the same time that we just learned the High-Speed Rail Authority is planning to break its long-term commitment to include Merced and the Northern Central Valley because the cost is a one-time $1 billion. But perhaps even more concerning, is the impact this bill will have in places like Merced that still has double-digit unemployment. We live in a part of the state where people want to work, to earn an honest day’s wages, and simply cannot find a job.
“The reality is that in some areas of the state, $15 may not be high enough. But in other areas, like Merced, we will suffer,” Gray continued. “I honestly don’t know how we will pay for these massive new costs. We do not have the Fortune 500 companies in the Central Valley. We have small businesses, family farms, and so many hardworking Californians striving for a better life. And when the rents and cost of living begin to reflect those in the big cities, my constituents will have no choice but to uproot their families and leave. They will be priced out of the state, just like the thousands who have been priced out of the Bay Area and LA. That is why I voted no on SB 3.”
The increases are projected to eventually cost California taxpayers an additional $3.6 billion annually for higher government employee pay.
Art Pulaski, executive secretary-treasurer of the California Labor Federation, hailed what he called a historic day for California and the country.
"California takes a massive leap forward today in the fight to rebalance our nation's economy," Pulaski said in a statement.
After the Assembly and Senate votes, dozens of supporters gathered on the lawn outside the Capitol for a labor-organized rally. Many waved signs saying "$15 California."
Krystine Wilson, 27, of Carmichael said the higher wage will help her avoid racking up late fees and payday loans when the $10 an hour she earns at a fast-food restaurant isn't enough.
"We have to decide whether or not we want to pay a certain utility bill, or do we want to pay the rent?" Wilson said. "We have to make that decision every month."
The Associated Press contributed to this article.