The California Restaurant Association argued against the bill as the already approved statewide minimum wage increases have not even been fully implemented. Additionally, SB 3 lacked CRA’s proposed mitigating measures that would have established a youth wage and provided for a “total compensation” structure that accounts for tips.If this proposal would to have made it out of the Assembly and signed into law by the governor, it would have constituted an unprecedented 63% cumulative increase to the state's minimum wage in a three-year period between 2014 and 2017.
The cost to the state of California alone would have been over $4.7 billion during the phase-in period of SB 3. The Executive Branch’s Department of Finance came out with an “Opposed” position on the bill given the fiscal impacts as well as the negative impact it would have on the state budget and economy. Furthermore, they indicated that it would slow down the employment growth of the state, which would result in a negative impact on taxes collected by the state due to a slower personal income growth.
The CRA advocacy team will continue to monitor and track this bill. If any changes or last minute issues arise with this bill, we are ready to do our due diligence to engage with members of the Assembly to push for the mitigating measures we have been pushing at the state and local level.