Last night the California legislature approved Assembly Bill 10 (Luis Alejo (D-Salinas)) to raise the California minimum wage to $10 by 2016, with Governor Brown indicating he will sign the bill.
When enacted, AB 10 will raise current California minimum wage from $8 to $9 on July 1, 2014 and then to $10 on January 1, 2016.
While California’s minimum wage at $8 per hour has been significantly higher than the federal rate of $7.25, the legislature had not increased California minimum wage since 2008. To counter the effects of a stagnant state minimum wage, some cities like San Francisco and San Jose have passed on their own higher minimum wages (at $10.55 and $10), respectively.
This summer has seen significant activism to raise the minimum wage. July 24th was the National Day of Action to Raise the Minimum Wage, marking the four-year anniversary since the federal minimum wage was raised to $7.25 per hour. In the last 30 years, Congress has voted to raise the minimum wage just three times. The current value of minimum wage today is nearly a third lower than it was in 1968. Meanwhile, chief executives at the nation’s top corporations have seen a median wage increase of 16 percent in the last year alone.
It is no surprise that income inequality has risen nationally, but few realize that California ranks third worst in the country when it comes to the income gap between rich and poor.
AB 10’s minimum wage increases would go a long way toward closing this gap.
Raising the minimum wage will benefit working families. According to the Economic Policy Institute, women constitute 55% of the workers who benefit from raising the federal minimum wage. In the restaurant industry, women make up 66% of the workers paid the federal sub-minimum wage. More than 25% of those who would benefit are parents. The burden of low wages also falls disproportionately on people of color who are 42% of minimum wage earners despite being only 32% of the total workforce.
In addition to improving the lives of workers, increased wages will increase consumer spending, benefitting the economy overall.
At the national level, pending legislation would raise the minimum wage to $9.80 in three phases and then index it to inflation. The federal legislation would also raise the sub-minimum wage paid for tipped workers (which has not been raised since 1991) from $2.13 in 85 cent increments until it reaches 70% of the minimum wage.
Recent community actions have drawn greater attention to this issue of low wages. For example, workers at places such as McDonalds and Taco Bell have been staging one-day walkouts to protest their low wages. The New York Times described a worker, Ana Salvador, whose job is at a fast food restaurant inside the Smithsonian Institution’s Air & Space Museum, did not pay enough to support her four children. She had to rely on food stamps and Medicaid to help her family.
While AB 10 is great progress for California, federal lawmakers need to raise the minimum wage and at all levels policy makers must institute meaningful change to wage policies to ensure workers nationwide can support themselves, their families and the economy.