California lawmakers, unions reach $15 minimum wage deal: papers

[March 28, 2016]  By Sharon Bernstein
 
 SACRAMENTO, Calif. (Reuters) - California lawmakers and union leaders have reached a tentative deal to raise the state's minimum wage to $15 over six years that could avert a campaign to bring the issue to voters, two California newspapers reported on Sunday, citing unnamed sources.

The deal, if passed in the state legislature and signed into law by Governor Jerry Brown, would add to a wave of minimum wage increases at the state level in the United States, where the federal minimum wage has remained at $7.25 an hour for more than six years.

The agreement, as reported by the Los Angeles Times and the Sacramento Bee, would gradually raise the minimum wage in the most populous U.S. state from the current $10 to $15 in 2022. Businesses with fewer than 25 employees would have one extra year to comply with the proposed law.

The Bee said Brown is part of the agreement, while the Times said the Democratic governor could make a formal announcement on a deal as early as Monday.

A spokesman for Brown was unavailable for comment on Sunday.

Sources told the Times that lawmakers could vote on the proposed agreement by the end of next week by amending an existing wage-hike bill.

To pass in the legislature, any minimum wage hike would have to win the approval of moderate Democrats, who in the past have blocked key legislation backed by the governor and the majority party's more liberal leaders.

INCOME INEQUALITY

Raising the minimum wage to fight income inequality has cropped up on many Democratic candidates' agendas ahead of the November presidential, congressional and state elections.

But the idea has drawn fierce opposition from conservatives and some business groups, who have said a higher minimum would harm small businesses and strain the budgets of government agencies forced to pay more to workers.

"Let's start by calling this irresponsible," said Michael Saltsman, research director at the Employment Policies Institute, a fiscally conservative think-tank that has argued against minimum wage hikes.

"When you talk about these really massive jumps it's no longer an impact at the margin, it’s the sort of thing that could be the difference between a business staying open and closing," he added.

In 2013, Brown signed into law a measure that gradually increased the minimum wage from $8 to $10 an hour in 2016. But he said earlier this year that any future increase has to be done "very carefully" and over time.

The latest proposal would allow a sitting governor to stop the increases in the event of a recession, the Bee reported.

Labor unions' proposal to raise California's minimum wage to $15 an hour by the year 2021 has qualified to be listed on the upcoming November ballot in the state.

Supporters of a minimum wage increase who pushed for the ballot question are optimistic the deal would allow them to withdraw that initiative, the papers reported.

But Steve Trossman, a spokesman for the Service Employees International-United Healthcare Workers West, told the Times the union wanted to see the details of the deal before withdrawing the initiative.

Trossman was not immediately available for comment.

Fourteen states and several cities began 2016 with minimum wage increases. Many are now in the midst of multi-year phase-in plans that will ultimately take them to between $10 and $15 an hour.

(Additional reporting by Brendan O'Brien in Milwaukee; Editing by Alan Crosby and Mary Milliken)

[© 2016 Thomson Reuters. All rights reserved.]

Copyright 2016 Reuters. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.