On May 30, the California Assembly passed AB 10, a bill that would increase California’s hourly minimum wage from $8 to $9.25 in three separate increments over the next three years. Thereafter, the bill would require the minimum wage to adjust annually for inflation.
The bill passed 45-27 with a vote along party lines.
Assemblyman Luis Alejo (D-Salinas) authored the bill in an effort to address the widening income gap. According to Alejo, minimum wages have not kept pace with the cost of living and has equated to a decrease in purchasing power. “We have created a system where we pay workers less but need them to spend more,” says Alejo. “That causes middle class families to fall down the economic ladder. It’s the reason our middle class is shrinking and the reason we are facing the largest gap between upper- and lower-income Californians in at least 30 years.”
The California Chamber of Commerce (Chamber) along with a coalition of business groups, opposes the bill, labeling it a “job killer.” The Chamber states that California’s economic recovery is still in the infancy stage and that an increase in the minimum wage in 2014 will negatively impact any economic recovery by either limiting available jobs, or worse, creating further job loss.
The measure now goes to the Senate for consideration. Stay tuned for further developments.