Now that 2018 is here, California has once again raised the minimum wage for the second year in the row. The increase will move the minimum wage pay rate by .50 cents to $10.50 an hour at businesses with less than 25 employees. For businesses with more than 25 employees, the rate will move up to $11 an hour.
Under California’s minimum wage law, wages will continue to rise incrementally for the next several years. By 2022, employees who work for large companies are expected to earn $15 an hour, while employees working at smaller companies will reach $15 an hour by 2023. However, the expected increases can be delayed if California’s economy becomes shaky.
However, some California cities have already taken measures to pay their minimum wage workers more. In Los Angeles, Pasadena and Santa Monica, the minimum hourly wage has already been set at $12 for large companies and $10.50 for small firms. The rates will increase to $13.25 and $12 in July and should reach $15 for large companies by 2020 and 2021 for smaller companies.
The minimum wage will increase in Bay Area cities as well. Palo Alto will raise its current $12 minimum wage to $13.50 on January 1st. Mountain View’s minimum wage will move from $13 to $15 on January 1st as well.
The Pros and Cons of Increasing Minimum Wage
Those who are in favor of the minimum wage increase say it will help shrink the growing divide between the rich and poorer working families who continue to struggle with California's high housing costs. However, business groups have argued that a $15 minimum wage will force smaller businesses to close, ultimately resulting in fewer job opportunities for unemployed individuals.
The minimum wage increase will give the average full-time worker an extra $1,040 in annual income. For businesses, the increase means they must account for thousands of dollars in additional payroll costs.
For many though, the minimum wage increase is not realistically enough to meet their growing economic expenses. According to Larry Gross from the Coalition for Economic Survival, the new changes will not have a big enough impact to relive the state’s current housing crises that many low-earning workers must face.
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