California Assemblyman Luis Alejo (D-Salinas) saw his bill to increase the State’s minimum wage move forward late Friday, August 30. Assembly Bill 10 (AB 10) passed the State Senate Appropriations Committee by a 5 to 2 vote. “California is experiencing the largest income gap in at least 30 years,” says Alejo. “Those at the lower end of the income spectrum are struggling with the rising cost of goods and services while many middle-class families continue to slip down the economic ladder.”
The minimum wage debate has energized economists and politicians since the 19th century. Proponents believe that a higher standard wage decreases poverty and forces companies to be more efficient. Others feel that creating artificially high wages, if fact, causes unemployment and hurts economic development.
AB 10 would, in 2014, increase the minimum wage by 25 cents per hour to $8.25. Then a second increase of 50 cents in 2015 would occur. With another 50 cent increase in 2016, the minimum wage would be $9.25. There after increases, if the legislation passes as is, would be tied to the rate of inflation. Should deflation occur, the minimum wage remains the same.
The federal minimum wage is currently $7.25. When a state creates a higher wage limit, the state’s higher standard applies. There has been no state minimum wage increase since 2007. The cities of San Jose, Long Beach and San Francisco created higher minimum wage ordnances in recent years.
“Addressing the minimum wage crisis city by city will prove to be costly and detrimental,” Alejo said as his legislation moved forward. “It’s time that we address the minimum wage issue on a statewide level. Raising the minimum wage would put more money in the pockets of workers struggling to provide food, clothes, and housing for their families. This, in turn, would generate consumer spending and give a much needed boost to the economy.”