California To Raise Minimum Wage To $10 By 2016

minnwageAs the only full-service POS provider — from software development to franchise incubator to ongoing support — part of Sintel’s commitment to our customers and industry is to share high-impact news. Whether you’re a first-time franchise hopeful, a small business owner or an established chain, it’s always smart to stay on top of legislative and other industry trends.
Nation’s Restaurant News (NRN) is reporting that California lawmakers have approved an increase in the minimum wage from $8 per hour to $10 per hour by 2016. This represents the first such increase in five years.
Following earlier approval by the state Senate, the state Assembly approved the AB10 bill on Thursday, September 12, in a late-night 50-to-25 vote. In a statement following the vote, Governor Jerry Brown said, “This legislation is overdue and will help families that are struggling in this harsh economy.”
The bill’s authors were quoted, “We have created a system where we pay workers less but need them to spend more [and] that causes middle-class families to fall down the economic ladder. It’s the reason our middle class is shrinking and our income gap is now wider than ever.”
AB10 calls for a step-wise increase in the current minimum wage from $8 per hour to $9 per hour on July 1, 2014, and to $10 per hour on January 1, 2016.
California’s current $8 exceeds the federal minimum wage of $7.25 per hour, a distinction held by a reported 18 other states and the District of Columbia. Washington state is named in the article as currently having the nation’s highest minimum wage.
The California Restaurant Association (CRA) and other business lobbyists had opposed the bill, depicting it as a 25% wage hike over an 18-month period. This logic, however, essentially overlooks the prior five-year period with no minimum wage increases.
NRN writes, “Several factors fueled support for the pay increase, including the ‘growing narrative nationwide about the working poor, fomented by labor groups,’ according to Jot Condie, CRA’s president and chief executive, quoted in a interview following the vote. The article noted that earlier in the legislative session the CRA did manage to strip an attempt to link California’s minimum wage to the Consumer Price Index from the AB10 bill.
NRN concludes, “Assembly speaker John Perez, however, argued that a pay hike is just what the state’s economy needs.”
“‘A $10-per-hour minimum wage boosts earnings by $4,000 a year and will put $2.6 billion back into the hands of workers,’ said Perez in a statement. ‘This is money that will be spent at grocery stores, on school supplies and invested in education, and that ultimately strengthens the recovery and ensures California’s job market continues growing faster than the rest of the nation.'”
Read the full NRN post here.
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