Gov. Jerry Brown made ceremonial stops in both Los Angeles and Oakland Wednesday, signing into law AB 10 (Alejo), which will raise the minimum wage to $10 over an 18-month period beginning July 1, 2014.
This will be the largest increase in the history of the California minimum wage, and California is the first state to bring its minimum wage to the $10 mark.
“The turn of events in the final hours of the legislative session was disappointing to say the least,” CRA President + CEO Jot Condie said. “For the last three years, the fight against onerous wage mandates has become tougher, but the weakened economic environment hasn’t become any easier, especially for the thousands of small businesses providing entry-level job opportunities.”
Over the next two years, restaurants across the state will face a 25% increase in the minimum wage – as well as the associated labor costs, including workers’ compensation and unemployment insurance – on top of ever-rising commodity and energy costs, and massive unknown cost increases related to the Affordable Care Act.
Business-sector advocates weren’t expecting such a strong level of support from Brown, as it’s historically unusual for the Governor to play such a role in minimum wage negotiations. But mounting support for a minimum wage tied to the Consumer Price Index and aggressive, local pushes for “living wage” ordinances created an atypical environment for Brown to broker a deal with state leaders and the highly vocal labor groups whose negotiated wages are usually based on the state’s minimum wage.
“It’s my moral responsibility to do what I can to make our society more harmonious, to make our social fabric tighter and closer and to work toward a solidarity that every day appears to become more distant,” Brown said at the signing event in Los Angeles.
In the restaurant industry, the vast majority of workers earning minimum wage are either teenagers or servers who earn tips on top of the minimum wage. According to the Bureau of Labor Statistics, 46% of restaurant workers are younger than age 20, and 80% of restaurant minimum-wage employees work part time. A 25% increase in the minimum wage ensures that fewer workers will find entry-level jobs.