Making the Minimum Wage Count

On Monday, the Senate Appropriations Committee will consider Assembly Bill 10 (Alejo), which would increase California’s minimum hourly wage — currently $8 — in annual increments until it reaches $10 in 2018. Since it reached the California State Senate, AB 10 has been amended to remove a provision tying the minimum wage to inflation, which would have resulted in modest increases in hourly pay to keep pace with the rising costs of living.

Even without this provision, however, an increase in the minimum wage is good policy for California’s economy. Such an increase is long overdue and will provide extra financial security for California’s workers.

A minimum-wage increase would come at a crucial time for California’s low-wage workers, who generally have seen their earnings decline in recent years. Between 2006 and 2012, inflation-adjusted earnings for the bottom fifth of California earners declined by almost 6 percent. Furthermore, inflation has eroded the purchasing power of California’s minimum wage over the past four decades. Despite occasional increases in the minimum wage, the 2013 purchasing power of California’s minimum wage is nearly one-third below its 1968 value.

A minimum-wage increase would help workers of all ages and levels of educational attainment. Contrary to an often-repeated myth, workers earning minimum wage aren’t just teenagers who are entering the workforce for the first time. In 2012, nearly half of those earning up to the federal minimum wage nationally were over the age of 25, while more than 40 percent had at least some college education. And minimum wage increases don’t just raise the pay of minimum-wage workers — there is often a “spillover effect” for other low-wage workers already making slightly more than the minimum. Thus, an increase in the minimum wage would benefit a large segment of the workforce, one that California needs to succeed in order to drive the state’s future economic growth.

Raising the minimum wage is essential to improving the economic security of California workers, and Monday’s committee vote is a crucial step.

— Luke Reidenbach

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