Business & Economy

Bill headed to governor's desk would make Calif.'s minimum wage among highest in nation (Chart)

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California's minimum wage would rise to $10 an hour within three years under a bill that is now headed to the desk of Gov. Jerry Brown. 

The state Senate approved AB10 with a 26-to-11 vote on Thursday, sending it back to the Assembly for a final vote of 52-to-25. If Brown signs the bill — and he has said he supports it — California would lock in one of the highest statewide minimum wages in the nation.

California's minimum wage was last raised four years ago, and stands at $ 8 dollars an hour — 75 cents higher than the federal minimum.  Washington state currently has the top minimum wage, at $9.19 an hour, an amount that is pegged to rise with inflation. Some cities, including San Francisco, have set higher minimum wages.

California Minimum Wage, 1916 - 2008
Source: Industrial Welfare Commission

About 730,000 Californians earn a minimum wage of $8, and another 185,656 earn less per hour, according to the state Department of Finance analysis of U.S. Census data.

The California Labor Federation estimates 1.6 million hourly workers in the state earn less than $10 per hour.

In endorsing the bill and pledging to sign it, Brown said the state's minimum wage has not kept pace with rising costs, and that an increase was overdue.

Chris Giaco, a co-owner of the Long Beach vintage store Inretrospect, echoed the governor, saying "It seems like the minimum wage or living wage is considerably behind where it needs to be for people to actually make a living at a job."

Giaco says he already pays his four part-time employees more than $10 an hour, so he doesn't expect an increase in the minimum wage to affect his business. He said he sees the increase as one that could improve the local economy, putting more money into local pockets to be spent at his and neighboring businesses.

"We're these kind of small ma-and-pa organizations that are able to pay our employees a decent wage above minimum wage," Giaco said. "some larger businesses should be able to do that without too much of an issue."

But the California Chamber of Commerce and the California Restaurant Association are among those opposed to the wage hike. UCLA economics professor Jerry Nickelsburg said California's supply of low-paid jobs is transitioning to more automated work — and that increasing the minimum wage by two dollars in the next two years could actually hasten the loss of service jobs.

"What it may well do is move people out of employment where they are on payrolls of companies, to independent contractors where they're just selling their services on a contract basis and work for an even lower wage," Nicklesburg said.

This story has been updated.