California Increases Minimum Wage to $10.00/hour: What is the Real Impact?
Today the California legislature voted to increase the state minimum wage from $8.55 per hour to $10.00 per hour starting January 1, 2014, now making California the state with the highest minimum in the country. Second to California is the State of Washington with a minimum wage of $9.04 per hour, set to increase to $9.19 per hour also in January 2014. Although California has set a new standard, it follows the lead of its cities San Francisco who has a city minimum wage of $10.55 per hour and San Jose who already voted to set is City minimum wage to $10.00 per hour also starting in January 2014. Although there is a current debate in Congress regarding increasing the federal minimum wage requirements, the current federal minimum wage is $7.25 per hour.
While the increase in the minimum wage in California is a clear victory for labor and working class Americans, several critical questions remain still:
With nearly 50% of Americans living near or below below the poverty line, even with an increase to $10.00/hour, will this be enough for working class men and women to take care of their families? Did the legislature go far enough?
Will this change in the law chase businesses out of the State of California? Should more tax breaks and other tax credits be provided to encourage businesses to stay in the state?
How does this change in the law impact small businesses?
How do we strike a balance between the goals of helping American workers to be self-sufficient and to have the ability to take care of their families, yet create a climate that encourages business and entrepreneurship?
By Employment & Labor Law Attorney Angela J. Reddock