Will California’s $10-per-hour minimum wage push other states to act?

California is boosting its hourly minimum wage from $8 to $10, which would make it the highest in the US. President Obama wants to raise the federal minimum wage from $7.25 to $9.

Nick Ut/AP
California Gov. Jerry Brown signs a bill to raise California's minimum wage. The new law raises the state's minimum wage to $10 an hour within three years, from the current minimum of $8 an hour.

California is on track to have the nation’s highest state minimum wage: $10 an hour.

That would top the current highest state figure – $9.19 an hour in Washington State – as well as the federal minimum wage of $7.25, which is the level in all but 18 states and the District of Columbia.

Business organizations fought the law, which Gov. Jerry Brown (D) signed Wednesday. The California Chamber of Commerce calls it a “job killer,” and the California Restaurant Association said it was a "blow to small businesses” at a time when the state’s unemployment rate (8.9 percent) is well above the national rate (7.3 percent), making it one of the highest in the country.

"Small-business owners will now be forced to make tough choices including reducing employee hours, cutting positions entirely, and for many, closing their doors altogether," said John Kabateck, head of the California branch of the National Federation of Independent Business.

But with a Democrat as governor and union-friendly Democrats controlling the state Legislature, it likely was inevitable that the increase to $10 an hour would become law, if only (as the restaurant lobbying group suggested) to avoid a ballot measure on the issue next year.

Calling it a "matter of justice," Governor Brown cited the growing disparity between rich and poor as a prime reason for raising the minimum wage.

"Our society over the last 30 years … has experienced a growing gap between those who do work at the bottom and those who occupy the commanding heights of the economy," he said during the bill-signing ceremony in Los Angeles. "It’s my goal and it’s my moral responsibility to do what I can to make our society more harmonious, to make our social fabric tighter and closer, and to work toward a solidarity that every day appears to become more distant."

That’s good news for the estimated 3 million Californians – 1.5 million in full-time, year-round employment – currently in minimum-wage jobs.

Anthony Goytia, who works the overnight shift at a Wal-Mart store and lives in a garage with his wife and two children, told The Huffington Post, “If I had a higher wage, we would be able to rent an apartment. [Right now] we’re living in poverty. I have to live check to check.”

Under Assembly Bill 10, California’s minimum wage will rise from $8 (where it’s been for five years) to $9 an hour on July 1, 2014, and then to $10 on Jan. 1, 2016. The state wage level is not indexed for inflation, which means that Washington State’s (which is) could rise to above $10 an hour by then. A few cities – San Francisco among them at $10.55 – already have set their hourly minimum wage above $10.

A review of US Census data by The Sacramento Bee newspaper paints this picture of minimum-wage workers in California:

Teenagers in fast-food and other low-wage jobs account for just 5.3 percent of minimum-wage workers; the rest are adults older than 21, including 34 percent who are older than 40. Hispanics make up 40 percent of California’s population but account for nearly two-thirds of minimum-wage workers, many of them in the agriculture industry.

The federal minimum wage of $7.25 provides $15,080 a year assuming a 40-hour work week, which is $50 below the federal poverty line for a family of two. More than 15 million workers nationally earn the national minimum, which compares with the median national salary of $40,350, according to the US Bureau of Labor Statistics.

President Obama has pushed – unsuccessfully – for an increase in the federal minimum wage to $9 an hour by 2015, then indexing it to inflation. At that amount, a full-time minimum wage worker would earn roughly $18,000 a year, still below the poverty level for a family of four.

The last time Congress raised the federal minimum wage was in 2007, when a three-step increase from $5.15 to $7.25 in 2009 was approved. According to the National Employment Law Project, a minimum wage that had kept pace with inflation since 1968 would be $10.56 today.

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