Leno Bill Raises Minimum Wage in 2015, Lifts Californians out of Poverty

February 03, 2014

SB 935 Increases Floor Wage in Three Steps, Creates Automatic Adjustments Starting in 2018

SACRAMENTO – Senator Mark Leno today introduced SB 935 that will help lift Californians out of poverty by raising the state’s minimum wage in three steps, starting at $11 an hour in 2015 and increasing an additional $1 per hour in both 2016 and 2017. Beginning in 2018, the minimum wage would be adjusted annually to the rate of inflation.

“Low, stagnant wages have forced many hard-working California families to get by with paychecks that leave them below the poverty level,” said Senator Leno, D-San Francisco. “It is time to accelerate our efforts to increase the minimum wage and reduce income inequality within the state’s communities. In doing so, we will reward and respect hard work, reduce turnover, stimulate economic growth and give low-income workers a fighting chance to end their dependence on public assistance.”

In his state of the union address last week, President Barack Obama called on elected leaders across the nation to take action on raising the minimum wage. “To every mayor, governor, state legislator in America, I say, you don't have to wait for Congress to act,” he said. “Americans will support you if you take this on. And as a chief executive, I intend to lead by example.”

The President announced he is raising the minimum wage for workers under federal contracts to $10.10 per hour while Congress weighs a proposal by Rep. George Miller (D-CA) and Sen. Tom Harkin (D-IA) setting the federal minimum wage to the same amount. In addition, prominent conservatives across the country, including Bill O'Reilly, Patrick Buchanan and Ron Unz, have expressed support for raising the minimum wage.

Importantly, Gov. Jerry Brown took a necessary first step of signing legislation that brings the state’s lowest wage up to $9 per hour later this year and $10 per hour in 2016. It would, though, still fall short of both federal proposals and give Californians less purchasing power than the state’s minimum wage did in 1968. That year’s minimum wage, if adjusted for inflation, would be worth $10.77 per hour today. Last year’s action also did not include the critical step of requiring automatic increases in the minimum wage to protect future earnings against inflation.

The Census Bureau reports that nearly a quarter of California's 38 million residents, or 24 percent, live in poverty. An employee working full time earning $8 an hour brings home just $15,360 annually before taxes. The federal poverty level for a family of four with a single-wage earner is $23,850. San Francisco already has a higher minimum wage than the state and is considering raising it even higher. Los Angeles is also considering raising its minimum wage for hotel workers to $15.37 per hour.

“Continuing to boost the wage floor for California’s workers should be a key component of our economic recovery plan, not only because it helps power consumer spending, but also because it is the right thing to do for our communities and families,” said Jack Gribbon, California Political Director for UNITE HERE! “This legislation is critical to retail employees, hotel and food prep workers, home care aides and other low-wage earners who are gainfully employed yet struggle every day just to pay their utility bills and put food on the table.”

New research from the Institute for Research on Labor and Employment at UC Berkeley indicates that higher wages reduce turnover and improve work performance and have no negative effect on the number of jobs available.

“The federal minimum wage has historically been a floor, not a ceiling,” said Ken Jacobs, chair of the UC Berkeley Center for Labor Research and Education. “States with a higher cost of living often have higher minimum wages than the federal wage. Subsequently, local governments have begun raising their minimum wages above their states.”

SB 935 is supported by the California Labor Federation and other labor organizations, the Women’s Foundation of California and Western Center on Law and Poverty. The bill is co-authored by Senate President pro Tempore Darrell Steinberg and will be heard in policy committees in the Senate this spring.

For media inquiries, contact Ali Bay at ali.bay@sen.ca.gov or (916) 651-4011.