Gov. Jerry Brown signed legislation in downtown Los Angeles Wednesday that will raise the minimum wage in California from $8 an hour to $10 by 2016.
Brown was joined by the bill’s author, Assemblyman Luis Alejo (D-Salinas) and Assembly Speaker John Pérez, (D-Los Angeles) and other supporters at the bill signing ceremony held at the Ronald Reagan State Building on Spring Street. He then headed to Oakland for a second ceremony.
Under AB10, the state’s minimum wage will rise to $9 an hour on July 1, 2014, and then increase to $10 an hour on Jan. 1, 2016. It is the first adjustment in six years.
During that time, low-wage workers in California have seen their earnings decline, according to Alejo.
“With over 60% of our minimum wage workers 26-years-old or older, we have created a system where we pay workers less but need them to spend more,” says Alejo in a statement posted on his website.
“That causes middle class families to fall down the economic ladder. It’s the reason our middle class is shrinking and the reason we are facing the largest gap between upper- and lower-income Californians in at least 30 years.”
Between 2006 and 2012, the inflation-adjusted earnings of California’s bottom fifth of wages earners declined nearly six percent, according to a recent report by the nonprofit, nonpartisan California Budget Project. The report further states that the buying power of minimum-wage earners has steadily eroded over the past four decades.
The bill was opposed by some business leaders who said the increase would make it more difficult for companies to operate in the state, possibly damaging the California economy. Opponents said businesses would be forced to raise prices or hire fewer workers to offset the costs of the higher salaries.
Brown was unequivocal about his support for the bill when it was approved by the Legislature.
“The minimum wage has not kept pace with rising costs,” Brown said. “This legislation is overdue and will help families that are struggling in this harsh economy.”
The new law will have a high impact on California, which is reported to have the nation’s largest number of the so-called working poor.
Pérez hailed the legislation.
“Our workers are among the most productive in the world, and with the signing of the minimum wage increase, working people will see significant relief and help California’s economy continue to outshine the rest of the nation,” Pérez said.
In a previous statement, he said the additional money earned “will be spent in California, on things like school supplies and groceries, ultimately putting more than $2 billion dollars back into our economy annually while giving workers a significant $4,000 increase in their wages.”