Legislature Approves Wage Hike

Joined by three defections from a previously solid Republican wall of opposition, the Democrat-controlled California Legislature voted Wednesday to increase the state’s minimum wage by $1 an hour over the next two years.

Gov. Arnold Schwarzenegger, who had offered to accept a more gradual increase in exchange for easing overtime rules, indicated that he was likely to veto the measure, as he did last year over a less extensive minimum wage increase.

As the final week of the Legislature’s annual session neared its conclusion, lawmakers also moved to require that cigarettes be designed so they do not cause fires when left unattended, to allow for alternatives to high school exit exams, to crack down on computer spammers and to require disclosure of potentially cancer-causing chemicals in makeup.

In a year when business and labor are busy preparing for an intense special election battle in the fall, the minimum wage is an issue that Democrats consider one of their strongest arguments that the Republican governor has become too deferential to corporate wishes. California’s $6.75-an-hour minimum wage was at one time the highest on the West Coast but now lags behind Oregon’s and Washington’s.

Identical to last year’s proposal, the Democratic measure would raise California’s minimum wage to $7.25 an hour beginning in July. It would add another 50 cents to the rate starting in July 2007.

This year’s measure would also establish automatic increases, known as indexing, to keep pace with inflation. That provision made the bill, AB 48, stronger than the legislation Schwarzenegger vetoed last year, when he said “now is not the time to create barriers to our economic recovery.”

Schwarzenegger’s spokeswoman, Margita Thompson, said “the governor’s biggest concern” with this year’s proposal “is this indexing component, because it takes away the government’s ability to be flexible to the state’s economic indicators.”

People involved in negotiations that took place in recent days said Schwarzenegger offered to raise the minimum wage by $1 over two years if Democrats agreed to drop the automatic increases. The offer was also contingent on lawmakers classifying more types of employees as managers, so they would not have to be paid overtime, and also exempting from overtime employees who worked four 10-hour days instead of five eight-hour ones, according to administration and legislative officials.

Assemblywoman Sally Lieber (D-Mountain View), the author of the minimum wage legislation, denied that the administration had offered a concrete compromise. She said the automatic increases were essential to avoid recurring battles. But, she said, “We’re going to continue working with them, because what we’re going to get to is something that can get signed or become law.”

Other states have moved to increase their minimum wages, sometimes out of frustration with inaction on a federal level, where the $5.15-an-hour rate has not increased since 1997.

Seventeen states and the District of Columbia now have a higher minimum wage. This year, Hawaii approved a two-step increase to reach $7.25 in January 2007. Connecticut, Minnesota, New Jersey and Wisconsin also enacted increases. A successful ballot initiative in Florida last fall kicked in this year, raising that state’s rate to $6.15 an hour and linking future increases to inflation.

California’s $6.75-an-hour minimum wage is now lower than the rates in five states: Alaska ($7.15), Connecticut ($7.40 in January), Oregon ($7.25), Vermont ($7) and Washington ($7.35), according to the National Conference of State Legislatures.

Florida increased its minimum wage to $6.15 an hour through a voter-approved initiative that passed last fall. The initiative also included automatic increases based on inflation, as does Washington’s and Oregon’s.

The Florida initiative passed with 71% of the vote and further emboldened California labor advocates, who are contemplating launching an initiative campaign next year if Schwarzenegger vetoes the bill California lawmakers approved Wednesday.

Compared with last year’s, this year’s measure was approved by larger margins in both houses. In the Assembly, where the bill passed 49 to 30 in June, Republicans Bonnie Garcia of Cathedral City and Shirley Horton of Chula Vista as well as Democrat Barbara Matthews of Tracy all abandoned their past year’s opposition to support it.

Abel Maldonado (R-Santa Maria), who had voted against last year’s increase while he was in the Assembly, supported it in his new seat in the Senate, where it passed Wednesday 26 to 13.

“I think it’s pretty disingenuous to stand up here and say no to a minimum wage increase while we accept an $11,000 pay increase,” Maldonado said, referring to the 12% salary boost granted to lawmakers in May by an independent panel. They will now be paid at least $110,880 annually.

Maldonado also said he believed that California’s economy was strong enough to handle a higher minimum wage. “I’ve always voted no in the past because I thought the economy was trying to get better,” he said. “This year, I think it is better.”

Though the margins of support were larger than last year, they are not enough to override a Schwarzenegger veto, which would require a vote of two-thirds of the members.

The California Chamber of Commerce and the vast majority of Republicans argued that it would be an onerous burden on small businesses and that it would lead to the hiring of fewer workers and a continued push for automation to take over jobs now performed by people.

“They figure out how they need to provide the services in an economical way,” said Sen. George Runner (R-Lancaster). “Employees become too expensive and unfortunately automation becomes the answer.”

Under California’s current rate, someone earning the minimum wage for full-time work without any vacation would earn $14,040 a year. That is $2,050 below the poverty level for a family of three.

Last year, 1.4 million Californian workers earned no more than $1 over the minimum wage, according to an analysis by the California Budget Project, a Sacramento-based nonprofit that favors increasing the rate.

Although opponents said that many low-wage jobs were held by part-time workers and teenagers, the budget group’s analysis said 59% of people earning less than $7.74 an hour worked at least 35 hours a week and 60% were at least 25 years old.

In other actions Wednesday, state legislators:

* Required “fire safe” cigarettes, which would extinguish themselves when left unused. The bill, AB 178 by Assemblyman Paul Koretz (D-West Hollywood), is patterned after a law in New York and would require that the “safe” cigarettes be marketed starting in 2007. The Assembly approved the measure 43 to 31; it now goes to the governor.

* Required that cosmetics manufacturers disclose any carcinogenic ingredients. The Senate approved SB 484 by Sen. Carole Migden (D-San Francisco) by a vote of 25 to 15, and it now goes to the governor.

* Allowed pending high school graduates to satisfy either part of the state-required exit examination through alternative performance assessments that the superintendent of public instruction determines are sufficiently rigorous. AB 1530 by Assemblywoman Karen Bass (D-Los Angeles) passed the Senate 21 to 14 and needs final approval from the Assembly.

* Reached an informal agreement on legislation that allows California to join states that agree to send emergency resources and people to disasters like Hurricane Katrina. The agreement ends an impasse over whether California rescuers, including firefighters, would risk being governed by other states’ lawsuit rules and disability benefit limits when deployed outside California. The compromise ensures that responders will receive the same protections out of state that they receive on duty here. AB 823 by Assemblywoman Sharon Runner (R-Lancaster) passed the Senate unanimously and now heads to the Assembly.

* Prevented parents who molest their own children from escaping prison terms they would have gotten if they were not related to the victim. SB 33 by Sen. Jim Battin (R-La Quinta) passed the Senate unanimously and now goes to the governor.

* Allowed people who send unsolicited e-mail advertisements with false or misleading subject headings -- an increasingly common form of spam -- to be prosecuted for a misdemeanor and face up to six months in jail and a $1,000 fine. On a 28 to 8 vote, the Senate gave final approval to SB 97 by Sen. Kevin Murray (D-Culver City), and it now goes to the governor.

*

Times staff writer Dan Morain contributed to this report.