SACRAMENTO, CA -- While opposition to boosting California’s minimum wage rate has been eroding, as previous wage hikes “haven’t produced dire economic consequences,” experts contend that consumers will be the ones paying--as in paying more to eat out at restaurants, stay in a hotel or purchase products at stores where some of the lowest-paid workers are employed, reports the Los Angeles Times.
During his recent State of the State address, Gov. Arnold Schwarzenegger proposed to boost California’s current minimum wage of $6.75 an hour to $7.75 an hour by mid-2007--a 50-cent increase in October, followed by another 50-cent hike in July 2007, notes the newspaper.
Businesses that employ low-wage employees say a higher minimum wage rate would for force them to get rid of their workforce and raise prices; therefore putting them in a tough spot among competitors.
According to the newspaper, the California Restaurant Association is not going to ease its opposition to a minimum wage increase. Other employers and business groups, however, aren’t publicly objecting to the governor’s proposal because it would not “include future increases based on inflation.”
“This is probably something that is deserved,” Rusty Hammer, president and chief executive of the Los Angeles Area Chamber of Commerce, told the newspaper, adding, “As long as we know how much it's going to be, business is going to go along with this.”
The support of business interests could make it more likely that Schwarzenegger's proposal will win legislative approval, although organized labor plans to lobby against it on grounds that inflation indexing is necessary.
Organized labor groups are already planning to lobby against the governor’s plan, citing that inflation indexing is necessary.
“His proposal on the minimum wage is only half a step. We want indexing,” Art Pulaski, executive secretary-treasurer of the California Labor Federation, said. “Workers have lost 10% [to inflation] since Arnold came on board. It's not enough to just give them a dollar over 18 months. It doesn't catch them up, so we really have to index.”