Business & Economy

Raise California's minimum wage? Voters will likely weigh in

Jeremy Berg calls himself a
Jeremy Berg calls himself a "third-generation rag man". His grandfather started A and A Wiping Cloth in the 1940s.
Brian Watt/KPCC

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In the November election, Californians will likely be asked to decide whether or not the state should raise its minimum wage to $15 per hour, on a schedule similar to what Los Angeles approved last year.

Two initiatives to raise the minimum wage are clearing the hurdles necessary to make it onto the November ballot. The backers of one measure are in today L.A. today to deliver 100,000 signatures to county election officials - part of a statewide effort to deliver a total of 600,000 signatures to county registrars this week. Campaign organizers say they were required to collect at least 366,000 signatures to get their measure on the November ballot.

"People are enthusiastic, and they know that it is nearly impossible to get by on the minimum wage in California," said Sean Wherley, spokesman for the campaign for the ballot initiative called the Fair Wage Act of 2016. "This is the public's attempt to bring some stability to folks who are struggling every day."

The initiative, backed by the SEIU-United Healthcare Workers West, would increase the state’s minimum wage by $1 each year until it reaches $15 in 2021.

Another initiative, backed by another faction of the SEIU, would raise the wage to $15 by 2020 and require employers to allow workers to take six paid sick days a year.

Currently, California's minimum wage is $10 per hour, however a few cities throughout the state have passed their own ordinances, requiring employers to pay more than that. A statewide minimum wage hike would put most employers on the same track.

For that reason, L.A. businessman Jeremy Berg said he supports a statewide minimum wage increase. Last year, when the Los Angeles City Council was debating a citywide wage increase, Berg showed up to a hearing in Watts to tell council members how the wage hike was forcing him to consider moving his business, laying off workers, or outsourcing. 

Berg is the owner of A and A Wiping Cloth, which recycles discarded linen into industrial rags.  He employs 40 people, most of whom earn the minimum wage. He knew Los Angeles officials were determined to raise the minimum wage. Now that he has to pay more, he wants businesses throughout the state to pay more, to level the playing field. 

"When the city of Los Angeles keeps going up, but other locations don’t, well, you kind of scratch your head and go ‘Aw, man,” Berg told KPCC. "Is someone going to exploit the fact that they are paying workers less and tell their customers 'well, I'm not raising my prices because there is no need to'?'"

Berg said a statewide wage increase would create a more fair environment, not just for business owners like himself, but also for low-wage workers. "It's not fair to the working class to be paid minimum wage on one street that might be paid $15 while 50 miles north of LA, they're making less," he said. 

The ballot initiatives are certain to face opposition from some business groups.  The California Restaurant Association (CRA) issued a statement calling the SEIU-UHW measure a "recipe for disaster."

“Not only does it threaten small family-run businesses like restaurants, it will also have devastating impacts to education, seniors, services for the disabled, working families and more,” said Jot Condie, CRA president. 

The CRA also pointed out that Governor Jerry Brown recently raised concerns about a minimum wage increase while unveiling his budget.  

“Raise the minimum wage too much, and you put a lot of poor people out of work,” Brown told reporters earlier this month. “There won’t be a lot of jobs. It’s a matter of balance.”  

California's minimum wage increased on Jan. 1 from $9 to $10 per hour. Governor Brown's budget summary notes that this increase will cost the state's general fund more than $250 million a year. An increase to $15 an hour would cost the general fund more than $4 billion by 2021, the summary estimates. 

San Francisco, Oakland and San Jose have higher minimum wages than the state. Los Angeles and Los Angeles County's unincorporated areas will raise their minimum wage t0 $10.50 in July, the first step in a gradual climb to $15 per hour for most businesses by 2020. Santa Monica and Pasadena appear headed toward raising the minimum wage similarly in the coming weeks or months. Long Beach is drafting an ordinance to raise the wage to $13 by 2019.