[Update August 31,2002]
AB
2242 passed in the Assembly. Senator Debra Bowen opposed this bill when
it passed the Senate Appropriations Committee on 8/21/02 by a 7-4 vote.
However, the measure was never taken up on the Senate floor for a vote.
As a result, it's dead for the year.
Bill Summary
Excerpt of Summary
from Text:
Existing law requires
establishment of a minimum wage for all industries of not less than
$5.75 per hour on and after March 1, 1998.
This bill would
adjust the hourly minimum wage on January 1, 2003, and annually thereafter,
to maintain employee purchasing power. The automatically adjusted minimum
wage would be calculated using the California Consumer Price Index,
as specified. The Industrial Welfare Commission would be required to
publicize the automatically adjusted minimum wage.
This bill would
provide that its provisions may not be construed to preclude an increase
in the minimum wage greater than the formula would provide or to result
in a reduction in the minimum wage.
California Chamber
Summary:
Existing law requires
establishment of a minimum wage for all industries of not less than
$5.75 per hour on and after March 1, 1998.
This bill would
adjust the hourly minimum wage on January 1, 2003, and annually thereafter,
to maintain employee purchasing power. The automatically adjusted minimum
wage would be calculated using the California Consumer Price Index,
as specified. (Staff contact: julianne.broyles@calchamber.com)
Argument(s) in Favor
of Opposing This Bill Opponents argue that this measure will harm California's
economy because all future decision-making on our state's minimum wage
will be made in a vacuum, without regard to economic conditions. It
puts all future decisions on auto-pilot. Indexing the minimum wage will
result in further job losses to the workers of California.
The opposition states
that this measure will usurp the power of the IWC by arbitrarily increasing
the minimum wage without the benefit of study or investigation to determine
if such action is warranted.
With our state having
the second highest minimum wage in the country, there seems little evidence
that we should make this move while the economy is struggling. With
the indexing approach, our state's small businesses will be confronted
with yet another barrier to success. This is especially true for minority
and women-owned firms that make up the bulk of small business owners:
their profit margins are very low, less than two percent.
Opponents wonder
how much more can the state do to stifle free enterprise? Within the
last few years of labor law enactments alone, small employers have been
confronted with: minimum wages increases, mandatory daily overtime,
loss of scheduling flexibility, massive increases in civil and criminal
penalties, legal aid lawsuits, onerous Cal-OSHA guidelines and hikes
in penalties, job training programs dominated by labor unions, big hikes
in unemployment insurance benefits, costly workers compensation benefit
increases, and expansion of sick leave policies, to name a few.
A partial list of
organizations opposing this bill include:
Agricultural Council
of California
Automotive Aftermarket Services
California Building Industry Association
California Business Properties Association
California Chamber of Commerce
California Cleaners Association
California Farm Bureau Federation
California Grocers Association
California Hotel and Lodging Association
California Lodging Industry Association
California Manufacturers and Technology Assn.
California Restaurant Association
Employers Group
Greater Riverside Chamber of Commerce
Hollywood Chamber of Commerce
Western Growers Association
Argument(s) in Favor
of Supporting This Bill
Proponents state
that this measure is intended to protect the purchasing power of California's
minimum wage, which declined thirty-one percent from 1968 to 2000. During
22 of those 32 years, there was no increase at all in the state's minimum
wage, while inflation seriously eroded the relative value of that income.
Supporters cite
a review of the state's minimum wage by the California Budget Project
which estimated that, using the IWC's own methodology, the hourly wage
necessary for a full-time single worker to maintain a minimally adequate
standard of living is $8.27. Their calculations assume 51 weeks of work
per year, at 40 hours per week, and rental of a studio apartment.
The California Labor
Federation has petitioned the IWC to form a wage board and increase
the minimum wage, which could become effective in 2003. It claims the
employer-dominated IWC is stalling the process in the hope of missing
the deadline for an increase to be effective in January 2003.
Supporters contend
that low-wage jobs are proliferating, driving down union wages. Jobs
paying under $10 per hour are the fastest growing segment of the labor
force. According to the Budget Project, seven of the 10 fastest growing
occupations in California, measured in absolute terms, pay less than
$11 per hour. There are roughly one million workers in minimum wage
jobs in California and an additional two million workers are in below-poverty-level
jobs. The majority of minimum wage workers are adult primary breadwinners
in their families, and many are immigrants. By lobbying to keep the
minimum wage low, employers are able to decrease its impact on wage
levels. A higher minimum wage would help raise the tide for all workers
and for union contracts.
A partial list of
organizations supporting this bill include:
California Labor
Federation, AFL-CIO (Sponsor)
American Federation of State, County and Municipal Employees
Association of Community Organizations for Reform Now
Association of Retired Americans
California Conference of Catholic Bishops
California Conference of Machinists
California Congress of Seniors
California Federation of Teachers
California Independent Public Employees Legislative Council
California National Organization of Women
California Teachers Association
California Teamsters Public Affairs Council
Consumer Attorneys of California
Consumer Federation of California
Gray Panthers of Sacramento
Hotel Employees, Restaurant Employees International Union
History of the
Issue
Bill was first introduced
2/20/02. Passed in the Assembly 5/30/02 (47 Ayes, 30 Noes). To Senate
Labor & Industrial Relations 6/4/02 and amended 6/17/02.
Vote(s) by District’s
Legislator(s)
Senator Bowen voted
in support of this bill.
Current Status of
the Issue
Passed (5 Ayes,
2 Noes) in Senate Labor & Industrial Relations on 6/26/02. Referred
to Senate Appropriations.
Other Chamber
Positions
The Cal Chamber
took a position to OPPOSE this legislation. Significantly increases
employer costs by at least $416 million ($416 per minimum wage worker
yearly) by linking new mandate to annually raise the state minimum wage
to the fastest-growing state consumer price index, then requiring the
indexed increase to be rounded up to the nearest five cents, beginning
January 1, 2003.
Past Positions,
Policy on the Issue
The GAC recommended
to the Board that the El Segundo Chamber oppose AB 181 (Koretz). Bill
filed with the Chief Clerk pursuant to Joint Rule 56.Died pursuant to
Art. IV, Sec. 10(c) of the Constitution.
Discussion at
the Board meeting (2/19/02) suggested that new language be drafted
to oppose the issue rather than the specific bill. Position to
be Considered: The El Segundo Chamber opposes automatic annual
increases in the minimum wage. The Chamber is particularly concerned
linking state increases in the minimum wage to the federal consumer
price index does not take into consideration "real time" economic
conditions and would burden businesses in already challenging times.
Recommended
Action
The GAC recommend
to the Executive Committee that the Chamber take a position to OPPOSE
this legislation.