State’s Lowest Paid Get Raise Jan. 1Studies Show Consumers Would Pay More for Fairer Wages The state minimum wage rose by 75 cents on Jan. 1 to $7.50 an hour, bringing some relief to about 1.4 million people. The increase is California's first since a 50-cent boost in January 2002. Californians who had tried to get by on $14,040 a year will see an annual increase of $1,560 for a 40-hour work week. Passage of the new wage ended a three-year effort by Democratic lawmakers, labor unions and advocates for low-income workers to convince Republican Gov. Arnold Schwarzenegger that boosting the minimum wage would not slow California's economy. Many business owners, though they opposed the wage hike before it was approved in August, acknowledge that increased labor costs probably wouldn't hurt the state's economy. "For the most part, it's a nonissue because most of small business is paying more than the minimum wage anyhow," said Scott Hauge, president of Small Business California, a nonpartisan advocacy group based in San Francisco. Nationally, consumers say raising employee’s wages would be a worth paying a little more for goods and services, according to a study by the credit card issuer Discover. Nearly 60% of consumers polled for a survey by the credit card issuer said they would be willing to pay more for goods and services from small businesses that boosted employees' checks. The report showed that 70% of small-business owners expected no effect on their employee costs if the new Democrat-controlled Congress and President Bush agreed to raise the federal minimum wage to $7.25. The report was released in December. Congress, where Republicans controlled both houses for more than a decade and generally sided with their business allies, last raised the federal minimum wage in 1997. In 2004, 56.3% of workers earning no more than $1 above the minimum wage were 20 or older and worked at least 35 hours a week, concluded a recent study by the California Budget Project. Democrats, who will take power in Congress on Thursday, are committed to move rapidly on a minimum-wage vote. Rep. Nancy Pelosi (D-San Francisco), the incoming speaker of the House, said she would work to pass a minimum-wage law within the first 100 hours of the session. In the meantime, labor unions and Democratic lawmakers in Sacramento have their own plans to push a bill this year that would add an annual automatic cost-of-living increase to the state minimum wage. "While we're pleased that low-wage workers will receive a raise,
we know it is not enough," said Art Pulaski, executive secretary-treasurer
of the California Labor Federation. "We will continue to fight for
long-term solutions for California's working poor, which must include
indexing of the minimum wage." 01-02 |