Senate OKs Wage Increase

The state Senate on Thursday approved a two-step hike in the hourly minimum wage that would boost it to $7.75, the highest in the nation.

The bill, which passed on a party-line vote in the Democratic-controlled Senate, is expected to win an easy final tally in the Assembly before going to Gov. Arnold Schwarzenegger next week. A Schwarzenegger spokeswoman said he hadn’t taken a position on the measure.

Business lobbyists said they were counting on the governor to kill the increase.

“I think a veto would be consistent with his philosophical campaign agenda to improve job creation in California,” said Alan Zaremberg, president of the California Chamber of Commerce. He contended that farmers and retailers in highly competitive, globalized markets would be forced to fire workers rather than try to pass on higher labor costs to their customers.

The chamber, the California Restaurant Assn. and small-business organizations are orchestrating letter-writing drives, urging the governor to veto the hike. The business groups estimate that the 15% increase would cost employers $2.08 billion annually.

Assemblywoman Sally Lieber (D-Mountain View), who sponsored the bill in the lower house, said she hoped that Schwarzenegger would sign the bill as a way of polishing his populist image. She said she would try to convince the governor that putting more money in the hands of minimum-wage earners would spur the economy.

“They need to spend on immediate needs,” Lieber said.

The bill would raise the current $6.75 hourly minimum by 50 cents to $7.25 an hour on July 1, 2005, and to $7.75 on July 1, 2006. The first jump would catapult the California rate over the currently higher rates of its West Coast neighbors: $7.16 in Washington and $7.15 in Oregon and Alaska.

The federal minimum is $5.15 an hour.

“Our workers face the highest cost of living in the country. They deserve a raise,” said Angie Wei, legislative director of the California Labor Federation. She challenged the governor not to let “the cost of doing business in California outweigh putting food on workers’ tables.”

Efforts to raise the minimum wage, which had stalled during the mid-1990s under then-Gov. Pete Wilson, began to pay off in 1996 when voters approved a ballot initiative setting the rate at $5.75 an hour. Subsequently, the Democratic-controlled Legislature boosted it twice more to $6.75.

The series of increases, combined with the Legislature’s latest proposal, could hinder Schwarzenegger’s attempts to improve California’s business climate, said Martyn Hopper, California state director of the National Federation of Independent Businesses, which represents about 35,000 small companies in the state.

“Almost no one raises a family on the minimum wage rate,” Hopper said, noting that the bulk of the recipients are students, entry-level workers and retirees seeking to supplement Social Security.