SB 3 proposes to increase the state's minimum wage to $11 per hour on Jan. 1, 2016, $13 per hour starting July 1 2017, and beginning Jan. 1, 2019, the state minimum wage would go on auto-pilot for annual adjustments upward. The proposal does not include mitigating provisions, such as the CRA’s "total compensation" concept that would account for tips, a youth wage, and the bill includes indexing which sets annual wage increases on auto-pilot without any regard for the state of the economy at the time of the annual increases.
The state's previous minimum wage increases under AB 10 (Alejo) have not even taken full effect yet and the legislature is racing towards additional increases before even having the economic data on the impact of the current increases. AB 10 constituted a 25% increase to the state’s minimum wage, which was the highest increase ever. And no one has ever studied the negative impacts to businesses and job growth in the state. If this proposal were to be signed into law, this would constitute an unprecedented 63% cumulative increase to the state's minimum wage in a three-year period between 2014 and 2017.
Additionally, this proposal, once fully in effect, will even cost the California state government $680 - $860 million a year according to a study prepared for by Capitol Matrix Consulting. The Department of Finance has released its own analysis on SB 3 and has taken an “opposed” position given the astronomical fiscal impacts the measure would have on the state’s budget.
The next stop for SB 3 is the Assembly Committee on Appropriations. The CRA’s legislative advocacy team will be meeting with committee members, the Speaker’s office, and the Governor’s office over the next several weeks to present our concerns with the existing legislation and the lack of any mitigating measures.