On Monday, April 4, 2016, Governor Jerry Brown signed a bill into law that will increase the state of California's minimum wage to $15 per hour by 2022. California will have the highest statewide minimum wage by 2022.
Republicans and business groups warn that this move could reduce thousands of jobs. This wage increase could have a strong impact on small businesses in California. Currently, California's minimum wage stands at $10 per hour and will increase by a minimum of 50 cents next year and to $11 in 2018. Hourly wages will then increase annually by $1 every January until 2022. However, this is subject to change if the governor imposes a delay during an economic recession.
The article mentions that about 2.2 million Californians currently earn the minimum wage, but with this new wage increase that number could drop between five to ten percent.
California and Massachusetts currently have the highest statewide minimum wage at $10. There are many cities planning to raise their minimum wage over the next couple of years such as Los Angeles, Seattle and New York.
Do you think this is going to influence other states minimum wage rates over the next couple years?
http://www.usnews.com/news/business/articles/2016-04-04/california-governor-set-to-approve-highest-minimum-wage
Interesting article David. I do believe that this will have some influence on other states but not any time soon. Other states will probably want to wait and see what this increase in wage does to the California economy and wether or not it would be beneficial to them. New York also took action today by promising a $15 minimum wage in New York City by 2018 and $15 in other New York suburbs by 2021.
ReplyDeletehttp://pix11.com/2016/04/04/new-york-gov-cuomo-signs-minimum-wage-law/
I am very curious to see how this move works out for California and also NYC. There is strong evidence that small increases to minimum wage do not hurt employment and gradually benefit workers overtime, but a $15 minimum wage is no small increase what so ever. Increasing $1 per year is a huge change and will definitely shock the respective economies and who knows what the effect will be on prices and other states that have not yet raised the minimum wage. The drop in employment will be too large as a result of this minimum wage raise. I believe that too many jobs will be lost.
ReplyDeleteIt will be interesting to see the impact this leaves on California's job market. Personally, I believe that the increase in minimum wage is too high. Small businesses cannot afford a $5 increase in minimum wage, which will result in an increase in unemployment. California is already tied for the highest statewide minimum wage at $10, so why increase it by so much? A smaller increase in the minimum wage would be much more manageable.
ReplyDeleteIt is interesting to see that this is happening in many cities across the country at a similar time. Like other have said, I think an increase in the minimum wage is likely to cause problems with higher unemployment rates and higher living costs. It will be interesting to see if other cities, especially those that are geographically close by, increase their minimum wages as well in order to stay competitive in the labor market.
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