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California Set to Increase the Minimum Wage

In its first increase since 2008, California is poised to raise the minimum wage twice over the next few years – first to $9 per hour in July, 2014, and then to $10 in January, 2016. Legislation, which just passed both houses and is likely to be signed by Governor Brown, offers the promise of helping millions of low-income families make ends meet in the Golden State. This is big news for California workers, and represents a real boost to families whose wages have yet to recover from the most recent recession and a struggling California economy.

The economic recovery in California has been largely uneven due to reduced or stagnant wages and an increasingly tough labor market, especially for low-skilled and female workers. Depressed wages have not increased significantly since 1980 for the lowest income workers in the state, according to analysis by the Public Policy Institute of California. And as the California Budget Project (CBP) has highlighted, this has strained the state’s overall economy by reducing the purchasing power of Californians who live on the minimum wage.

As the CBP has well documented, the current minimum wage is just not enough to support a family. It takes an hourly wage of $14.64 in 2010 for a single adult to make enough to live modestly in the state, or $25.98 for a two-parent family.

Cities like San Francisco, San Jose, and Long Beach have already independently increased their minimum wage above the federal and state minimums, long recognizing that the families who live there face great economic burdens. 

But a statewide increase in the minimum wage is among the strongest tools available to policymakers to reduce poverty among the most vulnerable. As we have covered in the past, poverty – both nationally and here in California – disproportionately falls on children and ethnic and racial minorities. An increase in wages will be a sure boost to a wide range of households since a majority of minimum wage earners are over the age of 25.  

While some analysts – citing a slow recovering job market – are suggesting that there will be a moderate improvement in levels of child poverty when the Census Bureau releases new data next week, the Governor is in a position to take an active step to improve the well-being of families and fight poverty.

We applaud the Legislature for taking this important step and await the Governor’s approval. With his signature, more money will flow into California working families’ pockets, which is always a good thing. 

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