Minimum Wage Increase Goes to Governor, Its Fate Uncertain

A bill that would hike the minimum wage by 15% won final legislative approval Monday, but it is expected to have trouble finding favor with a governor who has made improving the state’s business climate his top priority.

Gov. Arnold Schwarzenegger has taken no official position on the measure. His stance will depend on how the minimum wage bill would affect job creation in California, said spokeswoman Ashley Snee.

Republican lawmakers and business groups are urging the governor to veto the bill.

In the final debate, Assemblyman Ray Haynes (R-Riverside) argued that raising the minimum wage often hurt low-income workers by forcing businesses to lay off employees to compensate for increased costs. “Why do we hurt the poor with these sort of misguided policies?” he asked.

The bill by Assemblywoman Sally Lieber (D-Mountain View) cleared the Assembly on a 41-33 party-line vote. It would raise the current hourly minimum by 50 cents to $7.25 on July 1, 2005, and to $7.75 on July 1, 2006.

The first increase would make California’s minimum wage the highest in the nation, jumping over rates of Washington, Oregon and Alaska. Even with the increase, California’s minimum wage would provide workers with barely enough income for a “subsistence” living, Lieber said.