OAKLAND — In signing a bill to raise Californias minimum wage to $10 an hour by 2016, Gov. Jerry Brown on Wednesday not only moved to increase the states hourly minimum for the first time since 2008, but also handed influential business interests a rare defeat.
The coming wage increase was good news to some job seekers Wednesday at the Central Valley Job Fair at Modesto Centre Plaza.
I think its great, especially with the cost of living rising so much as it has in the last year or two. We need to make sure we are keeping up with it, said Caitlin Bell, 25, of Modesto.
She attended the job fair presented by Rep. Jeff Denham, R-Turlock, and Alliance Worknet to explore other career opportunities, because shes hit the ceiling in terms of advancement with her current employer, she said. Bell said the company she works for pays minimum wage to the entry-level sales associates she oversees.
They have the opportunity to make commissions, but if you are just starting out, its not enough, she said.
The bill, celebrated by the Democratic governor and his labor union allies at ceremonies in Los Angeles and Oakland, was the only one of 38 bills designated jobs killers by the California Chamber of Commerce to make it out of the Legislature this year.
Its singularity suggested the limitations of more liberal elements of the Democratic Party, even in a heavily Democratic state and even after Democrats seized two-thirds majorities of both houses of the Legislature.
Among bills that failed to go forward this year were proposals to impose a moratorium on hydraulic fracturing, to impose a severance tax on the extraction of oil and natural gas, and to modify Californias property-tax limiting Proposition13.
The Legislatures restraint reflects the Democratic Partys gains in moderate districts in recent years and lawmakers increasing familiarity with a governor willing to veto legislation that business groups oppose. The chambers influential political action committee, JobsPAC, has poured millions of dollars into races throughout the state to help elect not only Republican candidates but Democrats the chamber considers sympathetic to business.
Youve got a whole bunch of (moderate Democrats), and I just dont think California Democrats wanted to declare war on California businesses, said Tony Quinn, a political analyst and former Republican legislative aide. I think the business community feels they did reasonably well.
Steve Smith, a spokesman for the California Labor Federation, discounted the chambers victories as those of a group playing defense all the time, and he said at the end of the day we feel very good about what the Legislature did.
Still, it is the third year in a row in which business groups have defended themselves relatively effectively from the bills they fear most. In Browns first year in office, 2011, five bills identified by the state chamber as job killers made their way to the governors desk. He vetoed four. After the end-of-session rush in 2012, six of of 32 bills designated as job killers reached Brown. He signed four of those measures and vetoed two.
We are pleased with our success, Denise Davis, a chamber spokeswoman, said in an email. We fought hard and made sure legislators understood how bad these proposed job killers would have been for California jobs and our economy.
Of the minimum-wage bill, she said, We all need to work together to improve the economy to offset the increased labor costs that will occur.
At the Modesto job fair, Tracy resident Stephen Richardson said, With respect to the companies that pay minimum wage, for the most part they are paying the most they can. As far as a business model goes, to be competitive, they are basically paying the most they can. Its the small mom-and-pops that it will affect the most. He said that while raising the minimum wage might be good for some workers, other could be laid off as a result.
Its a bad idea! she wrote. Its just going to make everything more expensive and wont make a difference, and then those people who dont make minimum wage will struggle more because they will have to pay more and not get a raise.
Brown has courted business groups since taking office, and his relationship with oil, telecommunications and health care companies, among other monied interests, is one of many reasons any Republican who cannot self-finance his or her campaign is expected to have difficulty competing with Brown in his likely re-election bid next year.
The minimum-wage bill authorizes the first increase in the states hourly minimum since 2008, when it was increased 50 cents to $8. The bill, Assembly Bill10, by Assemblyman Luis Alejo, D-Watsonville, will raise the minimum hourly wage from $8 to $9 on July1, 2014, and to $10 on Jan.1, 2016.
The bill originally would not have raised the minimum wage to $10 until 2018, but Brown sought an accelerated schedule in his negotiations with lawmakers. Alejo said Wednesday that he removed an automatic cost-of-living escalator included in a prior version of the bill after talking with business groups earlier this year. The provisions removal was a move Brown endorsed.
I think what we did was a reasonable accommodation, Brown said at a job training center in Oakland. That fits my philosophy of pushing, pushing everybody, but not trying to push anybody too far.
Brown cited growing inequality between the upper and lower classes and cast as a moral imperative raising the wages of those who labor at the bottom.
I was brought up to believe in the doctrine of a living family wage, he said.
Business groups, including chambers of commerce, restaurant owners, retailers and farm groups, said the bill would unfairly increase costs on employers and jeopardize Californias economic recovery. Jot Condie, president and chief executive officer of the California Restaurant Association, called disappointing a minimum-wage increase of this amount, in one of the worst economies in the history of California.
California is one of 18 states and the District of Columbia that have minimum wages higher than the federal minimum of $7.25 an hour, according to the National Conference of State Legislatures, and $10 is likely to be among the highest in the nation in 2016.
Washington has the highest state minimum wage, at $9.19 an hour. It is one of 10 states that provide for automatic adjustments to the minimum wage based on cost-of-living measures.
The bill is expected to affect about 1.5 million full-time, year-round workers in California, about 14 percent of the states full-time work force, according to a Sacramento Bee review of U.S. Census data.
The broader effects of a minimum wage increase are the subject of longstanding debate. The California Budget Project, which advocates for low-income residents, said in a brief this month that the minimum wage has not kept pace with the rising cost of living and that raising the hourly minimum would help reverse the decline in the purchasing power of workers wages.
Proponents of raising the minimum wage say workers who earn more will spend more, stimulating the economy, and will require less government assistance.
Opponents of raising the minimum wage say requiring employers to pay higher wages will force them to offset costs by raising prices, hiring fewer workers or reducing workers hours. The National Federation of Independent Business, an advocacy group, released a study in March warning that a minimum wage increase under an earlier version of the California bill could result in the loss of more than 68,000 jobs in California over 10 years.
Modesto Bee staff writer Erin Tracy contributed to this report.