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Bill proposes to increase minimum wage

Action on bill aimed at raising low-paying jobs to $10 an hour could come as early as Friday

Posted: August 29, 2013 7:07 p.m.
Updated: August 29, 2013 7:07 p.m.

SANTA CLARITA - As fast food workers in Los Angeles and dozens of cities across the U.S. walked off the job Thursday in support of “living wages,” a bill is making its way through the California Legislature to raise the minimum wage to $10 an hour by 2018.

Assembly Bill 10 by Assemblyman Luis Alejo, D-Salinas, proposes to raise the state’s minimum wage by 25 cents an hour in 2014, bringing it to $8.25.

The bill also calls for annual wage increases over the next five years.

If passed, California’s minimum wage would increase to $8.75 per hour in 2015, $9.25 an hour in 2016, $9.50 an hour in 2017 and, finally, $10 per hour in 2018.

The Senate Appropriations Committee has until today to decide on the bill.

Advocates for a higher minimum wage note that jobs in low-wage industries have led the economic recovery, making it crucial that those jobs pay enough for workers who support families.

Workers participating in the fast-food protests are asking for $15 an hour. The federal minimum wage is $7.25 an hour, which works out to about $15,000 a year for full-time employees.

Most retail jobs, however, are part-time positions.

Some of the major fast-food chains mostly said they respected the right of employees during the one-day walk-out to protest wages.

Federal labor law gives all workers the right to engage in “protected concerted activities” to complain about wages, working conditions or other terms of employment.

Some chains said they don’t make pay decisions for independent franchisee owners of local fast-food restaurants — the pay rate is up to the individual owner.

Cost-of-living issues affect the minimum wage discussion as well.

The Los Angeles area ranks among the top 10 most expensive places to live based on prices for housing, groceries, utilities, transportation, health care costs and more, according to research by the Council for Community and Economic Research.

Household incomes in the region fall slightly below the norm, but transportation costs are 12 percent above average, and the median cost of a home — $513,600 — is double the national average of $186,200, the group found.

The restaurant industry, however, says it already operates on thin margins and insists that sharply higher wages would lead to steeper prices for customers and fewer opportunities for job seekers.

Groups advocating on behalf of companies, however, say the proposal to spike California’s minimum wage would hurt businesses.

It would cost businesses — already struggling to keep their doors open — an additional $37,600 per 10 full-time employees if the bill is passed, said the Valley Industry and Commerce Association. VICA estimates that 48,000 to 68,000 jobs will be cut if AB 10 is passed.

Any increase will add to the strain already felt by businesses in a fragile economy and solidify California’s reputation as unfriendly to businesses, a spokesman said.

Locally, Santa Clarita Valley business groups haven’t yet looked at the bill or taken a position on raising minimum wages.

The Valley Industry Association hasn’t taken a position on the propose wage increase and may not, said Kathy Norris, CEO and president for VIA.

While the wage increase may affect some of its members, VIA doesn’t have any retail membership within its group, Norris said.

“My instincts are, knowing the community, is that we would probably oppose such an increase,” said Terri Crain, president and CEO of the Santa Clarita Valley Chamber of Commerce.

Businesses can’t continue to recover with so many additional costs, such as Obamacare, Crain said.

“An increase in minimum wage won’t do anyone any good if employers are unable to meet the financial demands set forth by AB 10,” said David Adelman, VICA chairman.



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