Inflation forces California law to raise minimum wage to $ 15.50 by 2023

SACRAMENTO, California (AP) – California’s minimum wage will rise to $ 15.50 an hour next year, Governor Ginn Newsom’s administration said on Thursday, amid rising inflation that will benefit some 3 million workers.

The increase is required by state law passed in 2016. But that’s happening for Democrats in the nation’s most populous state as they rush to find ways to boost taxpayers’ bank accounts in an election year marked by rising prices that have weakened. Consumer purchasing power.

In a preview of his upcoming budget proposal on Thursday, Newsom redoubled his plan to send $ 800 in checks to car owners to make up for this year’s record high gas prices, despite opposition from Democrats in the legislature. And he unveiled a new offer to send at least $ 1,000 worth of checks to 600,000 hospital and nursing home staff to inform them of their dangerous work throughout the epidemic.

The starting salary is advertised on the Taco Bell window sign, Sacramento, California, Monday, May 9, 2022. (AP Photo / Rich Pedroncelli)

This is part of a new $ 18.1 billion taxpayer spending package with a combination of discounts, rent, health insurance and utility bills.

“Overall, we still have a very strong economic recovery in the state after the COVID-19 crash,” said California Treasury Department spokesman H.D. Palm trees. “But it is clear that we face many counterattacks. “Gas prices remain high, food prices are high due to inflation.”

California lawmakers voted in favor of raising the minimum wage to $ 15 an hour in 2016, but the increase was gradual over several years. Today, the minimum wage is $ 15 per hour for companies with more than 25 employees and $ 14 per hour for companies with less than 25 employees.

The law says that the minimum wage should increase to $ 15.50 per person if inflation increases by more than 7% between fiscal years 2021 and 2022. On Thursday, the California Department of Finance said it forecasts that inflation for fiscal year 2022, which ends June 30, will be 7.6% higher than last year, causing growth.

The official inflation figures will not be final until this summer. But the Newsom administration believes the growth will be more than enough to boost growth automatically.

California has about 3 million minimum wage workers, according to a conservative estimate from the state Treasury. The minimum wage increase will be about $ 3 billion, or less than 0.1 percent of the $ 3.3 trillion in personal income that Californians are projected to receive.

California Treasury Director Kylie Martin Bosler said the rise could lead to lower prices for restaurants with lower profit margins. But overall, he said raising the minimum wage “is expected to have very little effect on overall inflation in the state’s economy.”

The increase will have the biggest impact on small companies, which will see a $ 1.50 minimum wage increase in January. Carrie Jackson, a member of the California Center for Pacific Research at the Conservative Research Institute, says the growth could force some small business employees to work fewer hours.

“It can be very painful for them,” he said.

On Thursday, May 12, 2022, the administration of Governor G. Newsom offered to send $ 1,000 worth of checks to hospital and nursing home staff to report their dangerous work during the epidemic. (AP Photo / Jae C. Hong, File)

Inflation has been a problem everywhere, as well Consumer prices in the country increased by 8.3% last month compared to a year ago. Throughout the epidemic, labor shortages have pushed many companies to raise wages, sometimes beyond the minimum wage, simply to hire or retain employees.

The average price of gas in California has reached a record high level $ 5.91 per gallon in March. Newsom և Democratic lawmakers have vowed to return a record state budget surplus to taxpayers. But so far, despite being from the same party, they have not agreed on how to do it.

Newsom’s plan will send up to $ 800 checks to car owners, $ 400 per car for a maximum of two cars per owner, 750 $ 750 million for all three months of free public transportation.

Democrat leaders in the legislature rejected the plan, preferring instead to send $ 200 in checks to low-income taxpayers and their dependents.

“Senate Democrats do not believe the car ownership discount works,” said Senate President Pro Tempore Tony Atkins. “This plan leaves out non-car owners, including low-income, elderly Californians, who are also affected by the current high cost of consumer goods, and also deserve help.”

Republicans are in favor of temporarily suspending the gas tax, which is the second in the country at 51.1 cents per gallon. But the leaders of Newsom և Democratic Party rejected the plan, arguing that it would be better to send aid directly to taxpayers.

Newsom’s plan to send checks to healthcare workers will be extended to anyone working in a hospital or nursing home, including doctors, nurses, and other support staff. Employees will be guaranteed a $ 1,000 check. But if the companies agree to add $ 500, the state will pay $ 2,000 for it.

Dave Reagan, president of SEIU-United Healthcare Workers West, says staffing problems in hospitals and nursing homes only got worse as workers left the industry in large numbers during the epidemic due to “health risks, emotional stress and overwork.”

“These workers have been at the forefront throughout the COVID epidemic,” Bosler said. “They also suffer from a lot of very important maintenance problems. We hope the extra payment will help solve those problems.”

Newsom on Thursday announced new spending of up to $ 2.7 billion to fully fund the state lease support program, adding $ 1.2 billion to a fund that helps people pay utility bills and $ 439 million to temporarily cut diesel taxes. և $ 157 million to free the child. Low-income family care payments.

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