The states set possible precedent for nation’s highest minimum wage
On Monday, April 4, California and New York passed a law that sets a statewide minimum wage at $15-an-hour—the highest minimum wage in the country. The wages will gradually increase overtime, with California’s beginning next year and New York’s beginning in New York City in three years.
Presidential candidates Hillary Clinton and Bernie Sanders are behind the move. As Clinton hopes that the rest of the country follows in California and New York’s footsteps, while Sanders released in a statement that he is committed to encouraging these changes “so that everyone in this country can enjoy the dignity and basic economic security that comes from a living wage.” The raise in minimum wage has become part of Sander’s campaigning foundation, while Clinton is mostly behind an increase to $12 rather than $15. Not a single Republican vote supported the bill.
While many are behind the increase in minimum wage, including President Obama, who encourages Congress to raise the minimum wage nationwide, others are skeptical of the effects of a $15 minimum wage. An increase in minimum wage also means an increase in pay for government employees, which will impact California and New York’s taxpayers. Business experts are arguing that this new wage will negatively impact small business owners. A higher minimum wage will force small businesses to provide significantly larger paychecks, which could cost a large number of workers their jobs. Layoffs caused by businesses who cannot afford to pay the new wages might also negatively impact the productivity and success of independent and small businesses. Tom Scott, executive director of the state branch of the National Federation of Independent Business, said in a statement that the impact that this bill will have on small businesses will be “devastating.”
However, many are backing the move. Gov. Jerry Brown of California argued that the example that California is setting is about “economic justice.”
California plans to push the hourly wage up by 50 cents in 2017, aiming to have it at $11 in 2018. From there, the state’s hourly wage will increase by $1 every January until 2022, depending on the occurrence of an economic recession. According to California’s new law, businesses with 25-or-fewer employees have an extra year to begin the process, and wages will advance in compliance to inflation in the years to follow.