California raises minimum wage to $15

 

It will be phased in as gently as possible, but the newly adopted minimum wage in California isn’t free of controversy. While one faction says employees will have to be laid off, jobs cut, and prices raised to afford the new wage, others say the economy will be stimulated as more workers will now have buying power and disposable income to spend.

On Monday, April 4, Governor Jerry Brown signed legislation to raise California’s minimum wage to $15. This occurred just hours after New York’s governor signed a similar bill, also raising that state’s minimum wage to $15.

Under the plan, the minimum wage will increase from $10 to $10.50 per hour on January 1, 2017, for businesses with 26 or more employees, and then rises each year until reaching $15 per hour in 2022.

Small businesses — those with 25 or fewer employees — will be allowed additional time for employers to phase in the increases.

When fully enacted, a full-time minimum-wage employee’s annual income would be $30,000, up from the present-day $20,000. 

The California Department of Finance warned against raising the minimum wage, analyzing that it would cost the state more than $4 billion over several years.

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