California minimum wage would continue to go up under Gavin Newsom’s proposed budget

California’s minimum wage increases will continue as planned, having escaped the chopping block in Gov. Gavin Newsom’s revised 2020-21 budget.

California’s minimum wage is currently $12 an hour for businesses with fewer than 26 employees, and $13 an hour for businesses with 26 or more.

On Jan. 1, those numbers are set to increase to $13 an hour for small businesses and $14 an hour for larger ones. The increase “will affect roughly 60 percent of Californians,” according to Newsom’s budget summary.

Several business groups had called on Newsom to delay the wage increase as the coronavirus outbreak drove the state’s economy into recession and put millions of Californians out of work. The 2016 state law that called for escalating minimum wage increases allows the governor to suspend them if unemployment rises or sales tax receipts decline.

Newsom’s proposed budget states that the annual increases, set to take place until 2023, when the entire state will be $15 an hour, will continue as planned, “despite meeting the criteria for job losses and sales tax revenue declines that would allow the minimum wage increases to be paused for a year.”

Business groups aren’t happy.

“We would have liked for him to suspend the next minimum-wage increase, which is a new cost burden to many, if not most, small employers facing the grim reality of closing their doors very soon unless they can make ends meet,” said John Kabateck, state director for the National Federation of Independent Business California. “With few or zero customers patronizing Main Street businesses during this crisis, it is difficult, if not impossible, to expect these fragile owners to spend funds they don’t have without inflicting some modicum of pain upon their operation and workforce.”

Labor groups praised Newsom for sustaining the wage increases.

The California Labor Federation said in a statement that it was pleased with Gov. Newsom’s commitment to ensuring low-income workers “get the raise they deserve in January.”

‘The last thing we want to do as we look to economic recovery is take wages that have been promised to workers out of their pockets,” said spokesman Steve Smith. “The governor has many tough choices to make balance the budget, but, frankly, implementing the minimum wage increase as planned isn’t one of them. Low-wage workers spending wages at local businesses is key to getting our economy back on its feet.”

This story was originally published May 16, 2020 at 5:15 AM with the headline "California minimum wage would continue to go up under Gavin Newsom’s proposed budget."