By Hudson Sangree and Hector Amezcua
March 29, 2016 – 6:44 PM
- Major industries affected would be farming, restaurants and retail
- Impact could be greater in rural areas where cost of living is lower
- Farmers who sell produce out of state could have a harder time competing
A landmark plan to raise the state’s minimum wage to $15 by 2022 could create sweeping changes across the industries that rely on low-wage workers and improve the living standards for millions of Californians employed in farm fields, restaurants and retail stores.
“The expanse of the impacts is huge – a 50 percent increase in wages over five years to more than 40 percent of workers in the Sacramento region alone,” Jeffrey Michael, director of the Center for Business and Policy Research at the University of the Pacific in Stockton, said after Gov. Jerry Brown announced the plan Monday.
The plan, negotiated by Brown, labor leaders and legislators, could head off a similar ballot measure this November and raise the state’s minimum wage by about $1 per year, making California’s by far the highest statewide basic wage in the nation. It would increase the earnings of a full-time minimum-wage worker from $20,000 a year today to $30,000 per year in 2022.
Brown called the wage increase a matter of “economic justice” at a news conference Monday in the state Capitol.
Some cities, including San Francisco and Los Angeles, have already adopted similar proposals, and Sacramento leaders recently approved an ordinance to raise the city’s minimum wage to $12.50 an hour by 2020.
If the Legislature passes the newly announced plan, as expected, its positive effects could include boosting the living standards of the approximately 6 million Californians who earn the current minimum wage of $10 an hour and giving them more money to spend back into the economy.
The negatives could include fewer hours and fewer jobs for those workers, economists and employers said. Farmers who sell their produce out of state could be at a major disadvantage compared with farmers in states and nations with lower wages. And restaurant prices are likely to rise across the board.
The matter is so complicated, and fraught with unintended consequences, that it’s hard to know if the benefits or drawbacks will prevail, Michael said. Either way, he said, “The economic impacts are going to be enormous.”
Owners and employees of businesses that employ the bulk of minimum wage workers offered reactions this week ranging from outrage to joy, but some of their thoughts went beyond neat clichés.
At Monday’s news conference announcing the minimum-wage deal, longtime Burger King worker and activist Holly Dias, of Humboldt County, hugged the governor after tearfully describing how she struggled to support her infant son at the state’s lowest legal wage, which increased this year from $9 to $10 an hour.
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