California approves minimum wage hike to 15 dollars per hour | News | DW | 01.04.2016
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California approves minimum wage hike to 15 dollars per hour

Lawmakers in California have approved a dramatic increase of the state's minimum wage. One of the world's biggest economies, California would be the first US state to commit to such a large pay rate for the working poor.

California has approved a plan to raise the minimum wage to $15 an hour (13.17 euros) by 2022, a move that could help the state's working poor, but could potentially deprive other low-wage workers of jobs altogether.

Both houses of the Democrat-controlled California legislature approved the measure, which will now be sent to Governor Jerry Brown for signing. Brown, also a Democrat, has touted the bill and is expected to sign it into law.

"If you work full time, your family shouldn't live in poverty," state Assembly Speaker Anthony Rendon said Thursday in support of the bill.

California's minimum wage is currently $10 an hour. The measure would gradually raise the state's hourly minimum rate to $15 by 2022 for large businesses and by 2023 for smaller ones.

If enacted, the bill would put California - the most populous US state and one of the biggest economies in the world - on track to become the first state in the nation to commit to such a large pay hike for the working poor. Since 2009, a growing number of US states and cities have moved to surpass the federal minimum wage of $7.25 an hour.

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California decides to raise minimum wage

'It's going to be devastating'

Public opinion polls have shown strong support for the wage hike, but some said the measure would disproportionately harm businesses in poorer parts of the state, where the cost of living is not high enough to warrant such a wage increase.

"It's going to be devastating," said Chuck Herrin, owner of Sunrise Farm Labor, which provides roughly 2,500 agricultural workers each year in California's San Joaquin Valley. He predicted that farmers would hire 10 percent fewer workers because of the higher cost of business.

David Neumark, an economics professor at the University of California, Irvine, said the measure could reduce employment among the least-skilled workers by at least 5 to 10 percent, but the impact on employment could be even bigger because employers would have to absorb significantly higher costs.

"I would go so far as to call this reckless," he said.

But Governor Brown sought to allay concerns, emphasizing that the measure could be amended by lawmakers if needed and that the state could opt out of minimum wages increases if the economy is doing poorly.

bw/jr (Reuters, AP)

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