An increase in minimum wage approved Sunday by the California Assembly is expected to be signed into law by Gov. Jerry Brown—making it the highest rate in the country.
The new minimum wage will be increased in two stages. The first increase will take effect by July 2014 and will raise the wage from $8 to $9.25. The second increase will take effect by Jan. 1, 2016 and will raise the wage to $10.
According to the United States Department of Labor, California is currently among the top 10 highest minimum wages in the U.S. at $8.00 an hour. After the increase, it will become the highest minimum wage in the country, beating Washington state at $9.19.
Gov. Jerry Brown said in a statement on Sept. 9 that he believes the increase will be beneficial because of California’s economic struggles.
“The minimum wage has not kept pace with rising costs,” Brown said. “This legislation is overdue and will help families that are struggling in this harsh economy.”
David Vera, an assistant professor in the economics department, said there are two sides to the minimum wage increase to consider.
“It makes sense, because in a state like California that has one of the highest total number of working-poor families, the gains from the increase to $10 are just enough to bring a family of 3 out of poverty,” Vera said. “[But] the economy is barely recovering from a recession and an increase in the minimum wage hinders the weak recovery in California.”
In a monthly statement released by California’s Employment Development Department, California’s unemployment rate increased 0.4 percent since July. The unemployment rate is 8.9 percent, surpassing the national average of 7.4 percent.
“The major challenges that we face in the economy at the national and state level are high poverty and inequality, increasing number of workers employed in low paying industries and a large pool of unemployed workers from the 2007-2009 recession,” Vera said. “All of this will not be solved by only adjusting the minimum wage.”
Paul Ladwig, senior associate athletic director/external relations and operator of Fresno State’s The Bulldog Shop, said that small businesses might have a hard time adjusting to the wage increase.
“The minimum wage needs to keep in step with the cost of living and still make it feasible for business owners to run and operate their company as well as make it grow,” Ladwig said. “As higher skills and education are needed in a career path, those salaries need to increase with those positions. The question is will the business owners be able to adapt to the increase.”
Based off of a study conducted by The Center for American Progress Action Fund, an annual increase of $4,160 can pay for utilities, groceries or transportation for a year, or six months of tuition at a California State University.
Gabrielle Prado, a Fresno State freshman and sales associate at The Bulldog Shop, said she is looking forward to the wage increase.
“I’m very pleased to hear that minimum wage is rising,” Prado said. “As a full time student who works part-time, the money I’m making doesn’t cover my college and living expenses. I’m now realizing the importance of budgeting my money. But with minimum wage rising, I won’t be as limited to buying only the essentials.”