State Panel Rejects Minimum-Wage Increase

On a 3-2 vote, the California Industrial Welfare Commission on Friday rejected a labor-backed proposal to increase the state minimum wage by $1.25 over the next two years.

The proposal, which would have raised the earnings floor to $8 an hour by July 2004, had been before the commission since August, when members appointed a 10-member wage board to consider it.

That board returned to the commission Friday, deadlocked on a recommendation. The commission then took its own vote on the proposal, which would have raised the wage by 50 cents this July and an additional 75 cents in July 2004.

Though few observers were surprised by the rejection -- which comes in the midst of a slumping economy and soaring budget deficits -- state labor leaders said they would ask the commission to reconsider. If it does not, labor leaders will seek an increase through the Democratic-controlled Legislature.

“You just can’t live on $6.75 an hour in the state of California,” said Tom Rankin, governmental affairs director for the California Labor Federation-AFL-CIO. He noted that Oregon, Washington and Alaska have higher minimum wages.

Rankin noted that Senate President Pro Tem John Burton (D-San Francisco) is expected to push for legislation that would index the minimum wage to cost-of-living increases. A similar attempt failed in the Legislature last year.

California’s minimum wage last was raised by the commission in 2000, in two 50-cent increments that took effect in January of 2001 and 2002. The current $6.75-an-hour minimum is earned by more than 500,000 Californians, Rankin said.

-- Nancy Cleeland

and Dan Morain