(May 12, 2004) As the debate over an increase to the federal minimum wage intensifies, California's own debate on the issue waits in suspense.
California's minimum wage continues to be one of the highest in the nation. But legislation pending in the Assembly would mandate a two-tired increase, making the state home to the highest minimum wage in the country.
Chamber-opposed AB 2832 (Lieber; D-Mountain View) requires the state minimum wage of $6.75 per hour to increase to $7.25 per hour in 2005, and then to $7.75 per hour in 2006.
'California currently has the nation's highest energy costs and unemployment insurance tax rates,' said Julianne Broyles, director of employee relations and small business. 'An increase to the minimum wage would be another cost driver forcing more employers out of the state.'
Many other business costs also are directly affected by mandated wage increases, such as health care premiums, along with other employment-related taxes. All of these costs go up whenever payroll costs increase.
Instead of working to make California less competitive by mandating that the state minimum wage rate be the highest in the nation, as proposed by AB 2832, the Chamber believes the focus should be on removing the barriers to productivity and wage growth that government has imposed on the private sector.
Positive actions can include reducing costs associated with providing benefits such as health, unemployment insurance; increasing opportunities for small business formation; increasing the skills of the current and future workforce; enacting significant regulatory reform; and doing no more harm and resisting new efforts to increase either employment costs or business liability in California.
AB 2832 has passed the Assembly Labor and Employment Committee and was placed on the Assembly Appropriations Committee suspense file in late April. The committee is expected to vote on AB 2832, along with other bills in the suspense file, next week.
The Chamber is urging employers to contact the Assembly Appropriations Committee and urge members to oppose AB 2832.
To obtain a letter of opposition or get contact information for the Assembly Appropriations Committee members, please visit the Government Relations section of the website at: www.calchamber.com.
Staff Contact: Julianne Broyles