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Committees OK Democrats' minimum wage hikes, but not governor's
| Wednesday, Mar 29 2006 6:15 PM
Last Updated: Wednesday, Mar 29 2006 6:15 PM
Similar bills that would give 1.4 million minimum wage earners a dollar-an-hour raise and then adjust their pay each year to keep up with inflation were approved Wednesday by committees in the Assembly and Senate.
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But the Senate committee refused to vote on a rival bill backed by Gov. Arnold Schwarzenegger that includes a $1 increase but not an annual inflation adjustment.
The senator carrying Schwarzenegger's bill, Republican Abel Maldonado of Santa Maria, urged the Senate Labor and Industrial Relations Committee to reconsider its decision and pass his bill to avoid another veto.
"Gov. Schwarzenegger looked me in the eye and told me he would again veto a minimum wage increase with (inflation) indexing," Maldonado said. "I take Gov. Schwarzenegger at his word.
"By not considering my bill, the committee is playing politics with people's lives," he said.
The governor's press secretary, Margita Thompson, said Schwarzenegger opposes an annual inflation adjustment but stopped short of saying he would veto a bill containing that provision.
"He believes it would eliminate flexibility and use dated information in order to impose on the private sector the same automatic spending that has caused the state budget crisis," she said.
Schwarzenegger vetoed minimum wage increases in 2004 and 2005, but announced in January that he would support an increase this year without an annual inflationary adjustment. The bill he vetoed last year included such a provision.
Although the Republican governor said his change of heart did not indicate a shift to the political left, his backing of Maldonado's bill was widely seen as an attempt to cultivate a more moderate image as he prepares to run for re-election this fall.
The Senate committee voted 3-1 to approve a bill by Sen. Gil Cedillo, D-Los Angeles, that would raise the wage from $6.75 to $7.75 in two steps. An initial 50-cent increase would take effect 60 days after the bill was signed into law. The second 50-cent raise would kick in on July 1, 2007.
After that, the bill would require the wage to be adjusted each Jan. 1 to account for inflation in the previous year.
The Maldonado-Schwarzenegger bill would raise the wage to $7.25 next Sept. 1 and to $7.75 on July 1, 2007, but no members of the Senate committee asked for a vote on it.
The lone Republican on that committee, Senate Minority Leader Dick Ackerman of Fullerton, said he didn't request a vote because the bill was "going nowhere" and he doesn't support a minimum wage increase.
"We already have the highest-priced business climate in the world," he said. "This would make it harder."
Hours after the Senate committee acted, the Assembly Labor and Employment Committee voted 6-2 to approve a bill by Assemblywoman Sally Lieber, D-Santa Clara, that would raise the wage to $7.25 on July 1, 2007, to $7.75 on July 1, 2008, and then require annual increases for inflation.
Lieber said the automatic inflation adjustments are needed because the Legislature and governor have been unable to agree on minimum wage increases and because of the demise of the state Industrial Welfare Committee.
The five-member commission also had the power to raise the minimum wage, but it went out of existence in 2004 after the Legislature cut its funding. Democrats complained that the panel wasn't looking after the interests of workers.
"This shouldn't just be a political football every year," Lieber said, adding that many minimum-wage earners live below the federal poverty line despite working full time.
But business representatives said requiring annual minimum wage increases could hit employers at the wrong time, when the economy was in poor shape.
"It seems like an awfully blunt instrument policy tool to not take into account economic reality, where businesses would be hurting at the same time they're asked to absorb a minimum wage increase," said Michael Belote, a lobbyist for the California Lodging Industry Association.
But Ed Dunbar, a Sacramento restaurant owner who testified for Lieber's bill, said employers would find a way to accommodate the wage hikes.
"We're not talking about huge increases," he said.
Jonathan Ross, a lobbyist for the California Restaurant Association, said the California minimum wage has tended to keep up with inflation over the long haul.
"If you look at the historic average, we are within pennies," he said.
But Assemblyman Paul Koretz, D-West Hollywood, said that hasn't always been the case. He said there have been periods when there have been no increases and employees' wages have trailed far behind inflation.
The wage was last raised in 2002.
Koretz said it would be better for businesses to have small, anticipated annual increases instead of going several years without a wage hike and then being hit with a "sudden jolt" increase.
The Cedillo and Lieber bills now move to the appropriations committees in their houses, the last stops before the Assembly and Senate floors.
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