More minimum wage increases proposed

By CMTA Staff

Capitol Update, Feb. 14, 2014

With the passage of AB 10 (Luis Alejo, D-Salinas) last year that raised the State’s minimum wage to $10 an hour by 2016, California is slated to have the highest minimum wage in the country. Now, two additional proposals seek to increase that ceiling even higher, jeopardizing the state’s slow economic recovery and job growth.

On the legislative front, Senator Mark Leno (D-San Francisco) has introduced SB 935 that would increase the existing minimum wage to $11 an hour starting January 2015, followed by an increase to $12 an hour in 2016 and an additional hike to $13 an hour in 2017. This represents a staggering 62 percent increase over three years. Afterwards, the wage would continue to increase annually based on an inflation formula. The bill would not prohibit local jurisdictions from imposing a minimum wage that exceeds the State’s requirement.

In addition to the legislative measure, Silicon Valley millionaire and entrepreneur Ron Unz has submitted an initiative to the Secretary of State that would take the minimum wage increase debate directly to the voters. The “Higher Wages for California Workers Act of 2014” would increase the minimum wage in two dollar increments from $8 to $10 an hour in March 2015 then to $12 an hour in March 2016. The measure was cleared for signature gathering late last month and according to the Secretary of State, proponents must submit 504,760 valid signatures by June 26 to qualify the measure for the November 2014 ballot.

CMTA opposes both proposals. Notwithstanding the effect on hourly wages, the increases also raise compensation for salaried employees in order for those employees to qualify as “exempt”. An increase at this time fails to consider the additional costs manufacturers will face in the near future, including higher energy costs, regulatory fees and the costs related to the implementation of the Affordable Care Act.

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