As the California Legislature debates raising the minimum wage, I thought it was worth plotting the history of the state’s minimum wage (as adopted in law) against the federal minimum wage to give the policy discussion some context on how the Golden State compares. I also added SB 935 by Senator Mark Leno which is the focus of this year’s debate.
REMINDER: It was only last year when California enacted a change to its minimum wage through AB 10 by Assembly Member Luis Alejo. AB 10’s adjustments are included in the chart below.
Source: Department of Industrial Relations
California Leaves Feds in the Dust, Keeps Pace with Other States
As my analysis shows California’s historical minimum wage followed pretty closely to the wage floor set by Congress. Voters changed that in 1997 when they passed Proposition 210 setting the minimum wage at $5.75/hour. Californians haven’t looked back since. Up until the passage of AB 10, the largest difference between the state and federal minimum wage wage $1.65/hour in 2007. Beginning on July 1, 2014, the gap will grow further with the state wage rising to $9.00, then again in 2016 to $10.00/hour. With Congress unlikely to adopt a change to the federal minimum wage, when AB 10 is all said and done, California’s floor will be $2.75 per hour higher.
According to the National Conference of State Legislatures, by 2018 the Golden State will remain in the top 5 highest minimum wages in the country with Maryland, Connecticut, Hawaii, and the District of Columbia all having adopted higher schedules.
Unsatisfied with the rate set by AB 10, progressives doubled down with SB 935 (Leno), calling for a huge jump in the minimum wage to $11.00 an hour starting January 2015 then increasing a dollar a year until 2017. Leno’s bill calls for CPI adjustments after that point which I modeled out using the Fed’s two percent inflation target. The growth of the wage could be more or less depending on inflationary conditions in California.
We will have to keep an eye on SB 935 as it moves to the Assembly. If votes are a predictor, SB 935 may have some trouble headed its way. A simple majority of 21 votes is all SB 935 received from its house of origin, compared to the 26 Ayes AB 10 earned in last year’s Senate debate.