A minimum wage of $ 18? California entrepreneur launches initiative to raise workers’ wages

California’s minimum wage could rise to $ 18 an hour by 2025 under an election measure proposed by anti-poverty activist and Los Angeles entrepreneur Joe Sanberg.

The 2022 initiative, if passed, would make California the state with the highest minimum wage in the country.

California’s minimum wage will hit $ 15 an hour by January for the state’s largest employers. Companies with 25 or fewer employees will need to pay their employees at least $ 15 an hour by 2023, up from $ 10 an hour in 2017.

The full impact of the state’s minimum wage hike is not yet known. Sanberg said the state’s high rents and cost of living, along with income inequality, are forcing California to adopt an even higher minimum wage.

“The time is right, because the pandemic has increased people’s understanding of the realities that so many Californians face,” he said. “The cost of living is rising faster and faster, but wages have not increased in proportion.”

According to the proposal, California’s minimum hourly wage would increase by $ 1 each year on Jan. 1, through 2025 for larger employers and 2026 for smaller ones. Thereafter, the minimum wage would increase annually by the rate of inflation up to 3.5%.

Sanberg’s proposal would maintain an exit ramp allowing a governor to suspend minimum wage increases for a year if the state has a large budget deficit, declining job growth, or tax revenue. Gov. Gavin Newsom refused to step off the ramp last year during the pandemic.

Sanberg said he believes the minimum wage should be closer to $ 24 an hour, given the increase in worker productivity in recent decades. He said his $ 18 proposal reflects the “reality and political consideration” needed to gain the support of the majority of Californians.

Need a million signatures to reach the poll in California

Sanberg, a founding investor in meal delivery service Blue Apron and co-founder of personal finance company Aspiration, has previously advocated for California to launch and expand its own income tax credit.

The measure is one of the 2022 poll proposals that could altogether set campaign spending records. Four sports betting dueling proposals are collecting or will soon collect signatures, as well as measures to gut public unions and provide money to those who attend private schools.

Sanberg and other supporters must collect at least 1 million signatures over the next few months to place their measure on the ballot for next year.

“It’s an issue that touches people’s daily lives. It’s easy to explain and understand and I think we’re going to win. We plan to win,” Sanberg said.

California’s minimum wage of $ 15 an hour

California’s trip to a minimum wage of $ 15 did not result in significant job losses as feared, according to The Sacramento Bee’s review of state data in September. California’s unemployment rate fell at about the same pace as the rest of the country between 2016 and 2020, data shows.

Meanwhile, California’s lowest-paid workers have seen their wages rise faster than the national average.

“The economic reality is that when consumers have more money, everyone does better, especially small businesses.”

Some industries, such as hospitality and retail, saw their employment growth rates slow even before the pandemic that hit those industries. The cost of living has also continued to increase. Even though the lowest-paid workers in the Sacramento area saw their incomes increase by 28% between 2016 and 2020, rents for a one-bedroom apartment rose even faster, wiping out much of the wage gains.

Small businesses are already raising wages themselves to attract workers, said John Kabateck, California state director for the National Federation of Independent Businesses, a small business advocacy organization.

“The market, not the politicians and bureaucrats, should dictate the financial growth and success of workers in California,” he said. “Let the market dictate this and stop sending the message that mediocrity is a path to professional success in California.”

Supporters of the Sanberg measure said they believed the minimum wage of $ 18 an hour would have a positive impact on the state’s economy.

“Thousands of restaurants across the country are already raising wages to try to recruit staff, but many are finding that workers will not return to the industry until these wage increases are permanent,” said Saru Jayaraman, president of One Fair Wage and director of UC Berkeley’s Food Labor Research Center, in a statement. “This voting measure is essential to allow service workers to return to work in restaurants and to allow California restaurants to fully reopen.”

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