By ADAM BEAM, Related Press
SACRAMENTO, Calif. (AP) — California‘s minimal wage will leap to $15.50 per hour subsequent 12 months, Gov. Gavin Newsom’s administration introduced Thursday, a rise triggered by hovering inflation that may profit about 3 million employees.
The rise is required by a state legislation handed in 2016. But it surely comes at time for Democrats within the nation’s most populous state as they rush to search out methods to spice up taxpayers’ financial institution accounts in an election 12 months marked by rising costs which have diluted the buying energy of shoppers.
Thursday, in a preview of his upcoming price range proposal, Newsom doubled down on his plan to ship as much as $800 checks to automobile house owners to offset this 12 months’s record-high fuel costs regardless of opposition from Democrats within the Legislature. And he revealed a brand new proposal to ship no less than $1,000 checks to 600,000 hospital and nursing house employees in recognition of their harmful work all through the pandemic.
It is a part of a brand new spending proposal to place $18.1 billion into taxpayers’ pockets by way of a mix of rebates and help with hire, medical health insurance premiums and utility payments.
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“We’re nonetheless general having a really sturdy financial restoration within the state from the COVID-19 recession,” California Division of Finance spokesman H.D. Palmer mentioned. “But it surely’s clear that we face a number of headwinds: fuel costs stay excessive, meals costs are excessive due to inflation.”
California lawmakers voted to extend the minimal wage to $15 per hour in 2016, however the improve was phased in over a number of years. As we speak, the minimal wage is $15 per hour for corporations with 25 or extra employees and $14 per hour for corporations with 25 or fewer workers.
The legislation says the minimal wage should improve to $15.50 per hour for everybody if inflation elevated by greater than 7% between the 2021 and 2022 fiscal years. Thursday, the California Division of Finance mentioned they challenge inflation for the 2022 fiscal 12 months — which ends June 30 — will probably be 7.6% larger than the 12 months earlier than, triggering the rise.
Official inflation figures will not be ultimate till this summer time. However the Newsom administration believes the expansion will probably be greater than sufficient to set off the automated improve.
California has about 3 million minimal wage employees, based on a conservative estimate from the state Division of Finance. The rise within the minimal wage will probably be about $3 billion, or lower than 0.1% of the $3.3 trillion in private earnings Californians are projected to earn.
California Division of Finance Director Keely Martin Bosler mentioned the rise may trigger costs to leap for eating places, which have low revenue margins. However general, she mentioned the minimal wage improve is “anticipated to have a really minimal affect on general inflation within the state’s financial system.”
The rise will affect smaller corporations essentially the most, which can see the minimal wage leap $1.50 in January. Kerry Jackson, a fellow on the conservative-leaning Pacific Analysis Institute’s Middle for California Reform, mentioned the rise may trigger some workers at smaller corporations to work fewer hours.
“It might be very painful for them,” he mentioned.
Inflation has been an issue all over the place, as shopper costs jumped 8.3% nationally final month from a 12 months in the past. A labor scarcity all through the pandemic has prompted many corporations to extend pay generally past the minimal wage simply to draw and retain employees.
In California, common fuel costs hit a document excessive in March of $5.91 per gallon. Newsom and Democratic legislative leaders have pledged to return among the states’ record-breaking price range surplus to taxpayers. However up to now, regardless of being from the identical political occasion, they have not agreed on the way to do it.
Newsom’s plan would ship as much as $800 checks to automobile house owners — $400 per automobile for a max of two vehicles per proprietor — plus one other $750 million to present everybody free rides on public transportation for 3 months.
Democratic leaders within the Legislature have rejected that plan, as a substitute favoring one that will ship $200 checks to low-to-moderate earnings taxpayers and their dependents.
“Senate Democrats don’t consider a rebate tied to automobile possession does the job,” Senate President Professional Tempore Toni Atkins mentioned. “That plan leaves out non-car house owners, together with low earnings and aged Californians, who’re additionally impacted by the present excessive prices of shopper items and are additionally deserving of reduction.”
Republicans favor quickly suspending the state’s fuel tax, which at 51.1 cents per gallon is the second highest within the nation. However Newsom and Democratic leaders have rejected that plan, arguing it is higher to ship reduction on to taxpayers.
Newsom’s plan to ship checks to well being care employees would apply to anybody who works inside a hospital or a nursing house — together with docs, nurses and different assist employees. Staff can be assured a $1,000 test. But when corporations agree so as to add in one other $500, the state will match it for a complete of $2,000.
Dave Regan, president of SEIU-United Healthcare Staff West, mentioned staffing issues at hospitals and nursing properties have solely worsened as employees left the business in droves throughout the pandemic “due to elevated well being dangers, emotional and psychological stress, and overwork.”
“These employees have been on the entrance strains all through the COVID pandemic,” Bosler mentioned. “Additionally they are struggling very crucial retention points and shortages and we hope that extra fee will assist to handle these points.”
Newsom additionally proposed new spending on Thursday to $2.7 billion to totally fund the state’s rental help program, including one other $1.2 billion to a fund that helps folks pay their utility payments, $439 million to quickly droop the tax on diesel gas and $157 million to waive youngster care charges for low-income households.
This story has been up to date to appropriate California’s fuel tax. It’s 51.1 cents per gallon, not 51.5 cents per gallon.
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