BILL ANALYSIS �
-----------------------------------------------------------------
|SENATE RULES COMMITTEE | AB 10|
|Office of Senate Floor Analyses | |
|1020 N Street, Suite 524 | |
|(916) 651-1520 Fax: (916) | |
|327-4478 | |
-----------------------------------------------------------------
THIRD READING
Bill No: AB 10
Author: Alejo (D), et al.
Amended: 9/11/13 in Senate
Vote: 21
SENATE LABOR & INDUSTRIAL RELATIONS COMMITTEE : 3-1, 6/26/13
AYES: Monning, Leno, Yee
NOES: Wyland
NO VOTE RECORDED: Padilla
SENATE APPROPRIATIONS COMMITTEE : 5-2, 8/30/13
AYES: De Le�n, Hill, Lara, Padilla, Steinberg
NOES: Walters, Gaines
ASSEMBLY FLOOR : 45-27, 5/30/13 - See last page for vote
SUBJECT : Minimum wage: annual adjustment
SOURCE : Author
DIGEST : This bill increases the minimum wage, on and after
July 1, 2014, to not less than $9 per hour. This bill also
increases the minimum wage, on and after January 1, 2016, to not
less than $10 per hour.
ANALYSIS : Existing federal law sets the minimum wage at $7.25
an hour.
Existing law states that when state and federal laws differ, one
must comply with the more restrictive requirement. In
CONTINUED
AB 10
Page
2
California, the minimum wage is $8.00 an hour.
This bill:
1.Increases the minimum wage, on and after July 1, 2014, to not
less than $9 per hour.
2.Increases the minimum wage, on and after January 1, 2016, to
not less than $10 per hour.
FISCAL EFFECT : Appropriation: No Fiscal Com.: Yes
Local: No
According to the Senate Appropriations Committee:
The Department of Industrial Relations would incur costs of
about $400,000 (General Fund) to issue new Minimum Wage Orders
to approximately 815,000 employers in the state each time the
minimum wage is adjusted pursuant to this bill.
According to the State Controller's Office, state government
employs approximately 4,500 minimum wage workers, mostly
student assistants and seasonal employees. Based on a 40-hour
work week, this bill results in increased salary costs of
$585,000 in 2013-14, rising to $16.3 million in 2017-18
(General Fund and various special funds). Payroll taxes would
increase by $1.2 million in 2017-18 upon full implementation
of the wage increase. Additionally, there would likely be
increased state budget costs for workers currently paid
between $8.01 per hour and $10.00, the extent to which is
unknown. Finally, the bill would result in cost pressures to
increase wages for state employees who make more than $10.00
per hour.
SUPPORT : (Verified 9/12/13)
American Federation of State, County and Municipal Employees,
AFL-CIO
California Applicants' Attorneys Association
California Catholic Conference of Bishops
California Communities United Institute
California Conference Board of the Amalgamated Transit Union
California Conference of Machinists
California Employment Lawyers Association
CONTINUED
AB 10
Page
3
California Federation of Teachers, AFL-CIO
California Immigrant Policy Center
California Labor Federation, AFL-CIO
California National Organization for Women
California Nurses Association
California Public Defenders Association
California Rural Legal Assistance Foundation
California State Association of Electrical Workers
California State Pipe Trades Council
California Teachers Association
California Teamsters, Public Affairs Council
City of Berkeley
City of Lathrop
City of West Hollywood
Congress of California Seniors
Engineers and Scientists of California
Glendale City Employees Association
International Longshore and Warehouse Union
Laborers' International Union of North America Locals 777 and
792
Legal Aid Association of California
Mexican American Legal Defense and Educational Fund
National Association of Social Workers - California Chapter
National Women's Law Center
Older Women's League of California
Organization of SMUD Employees
Peace & Freedom Part of California
Professional & Technical Engineers, Local 21
Restaurant Opportunities Center of Los Angeles
San Bernardino Public Employees Association
San Diego Court Employees Association
San Luis Obispo County Employees Association
San Mateo County Central Labor Council, AFL-CIO
Santa Rosa City Employees Association
Service Employees International Union
Services, Immigrant Rights and Education Network
St. Anthony Foundation
UNITE HERE
United Auto Workers, Local 5810
United Domestic Workers of America, AFSCME Local 3930
United Food and Commercial Workers Union, Western States Council
Utility Workers Union of America, Local 132
Western Center on Law and Poverty
CONTINUED
AB 10
Page
4
Western States Council of Sheet Metal Workers
OPPOSITION : (Verified 9/12/13)
Acclamation Insurance Management Services
Air Conditioning Trade Association
Allied Managed Care
Brea Chamber of Commerce
California Agricultural Aircraft Association
California Association for Health Services at Home
California Association of Collectors
California Association of Health Facilities
California Association of Nurseries and Garden Centers
California Association of Wheat Growers
California Association of Winegrape Growers
California Bean Shippers Association
California Chamber of Commerce
California Cherry Export Association
California Citrus Mutual
California Cotton Ginners Association
California Cotton Growers Association
California Dairies, Inc.
California Farm Bureau Federation
California Framing Contractors Association
California Grain and Feed Association
California Grape & Tree Fruit League
California Grocers Association
California Hotel and Lodging Association
California Independent Grocers Association
California League of Food Processors
California Lodging Industry Association
California Manufacturers and Technology Association
California Pear Growers Association
California Professional Association of Specialty Contractors
California Restaurant Association
California Retailers Association
California Seed Association
California Spa & Pool Industry Education Council
California State Floral Association
California Tomato Growers Association
California Warehouse Association
Camarillo Chamber of Commerce
Culver City Chamber of Commerce
Far West Equipment Dealers Association
CONTINUED
AB 10
Page
5
Fullerton Chamber of Commerce
Gilroy Chamber of Commerce
Grater San Fernando Valley Chamber of Commerce
Greater Conejo Valley Chamber of Commerce
Greater Fresno Area Chamber of Commerce
National Association of Theatre Owners - California/Nevada
National Federation of Independent Business
Orange County Business Council
Oxnard Chamber of Commerce
Pacific Egg and Poultry Association
Plumbing-Heating-Cooling Contractors Association of California
Rancho Cordova Chamber of Commerce
Redondo Beach Chamber of Commerce
San Gabriel Valley Regional Chamber of Commerce
Santa Clara Chamber of Commerce and Convention-Visitors Bureau
Simi Valley Chamber of Commerce
Southwest California Legislative Council
The Tulare Chamber of Commerce
Valley Industry and Commerce Association
Western Agricultural Processors Association
Western Electrical Contractors Association
Western Growers Association
ARGUMENTS IN SUPPORT : Supporters argue that this bill will
strengthen and depoliticize California's minimum wage by
providing a modest increase to millions of struggling
Californians. According to proponents, over recent decades
workers at the bottom of the wage scale have been struggled
while the real value of their earnings has collapsed. In
support of this, proponents cite that the California Budget
Project has calculated that between 1968 and 2008, the
purchasing power of California's minimum wage fell by 24.8%.
Proponents also bring attention to the Public Policy Institute
of California's findings that California is experiencing the
largest income gap in at least 30 years which is exacerbated by
the fact that California's current minimum wage, when adjusted
for inflation, is less than the minimum wage workers earned in
1979.
Proponents believe the current method of determining
California's minimum wage rate is unconscionable because workers
are forced to watch the minimum wage languish year after year
until legislators decided to act. Proponents argue that AB 10
will address the current historic income gap, help California's
CONTINUED
AB 10
Page
6
economy bounce back, and bring the citizens of California back
to prosperity.
ARGUMENTS IN OPPOSITION : Opponents state that California's
economic recovery is still in the infancy stage and that an
increase in the minimum wage in 2014 will negatively impact any
economic recovery by either limiting available jobs, or worse,
creating further job loss. Opponents argue that although the
initial $0.25 increase may seem minimal, combined with the
unknown increased costs associated with the implementation of
the Affordable Care Act, the tax increases approved under
Proposition 30, and the partial reduction in federal tax credit
in 2014, could force a struggling employer to reduce their costs
in other areas, such as labor, or pass such increased costs onto
the consumers through higher prices.
Opponents state that a study conducted by the National
Federation of Independent Business found that depending upon the
rate of inflation in future years, enacting this bill could
result in 46,000 to 68,000 lost jobs in California by 2023, and
a reduction in real output somewhere between $4.7-$5.7 billion.
Opponents note that the Federation study also claims that the
increase in minimum wage might cause employees currently earning
above the minimum wage to put pressure on their employer for a
raise in order to maintain the wage premium between them and the
lowest-earning individuals in the economy, causing this bill to
have an emulation effect.
ASSEMBLY FLOOR : 45-27, 05/30/13
AYES: Alejo, Ammiano, Atkins, Bloom, Blumenfield, Bonilla,
Bonta, Bradford, Brown, Buchanan, Ian Calderon, Campos, Chau,
Chesbro, Dickinson, Eggman, Fong, Frazier, Garcia, Gatto,
Gomez, Gonzalez, Gordon, Hall, Roger Hern�ndez, Jones-Sawyer,
Levine, Lowenthal, Medina, Mitchell, Mullin, Nazarian, Pan, V.
Manuel P�rez, Quirk, Quirk-Silva, Rendon, Skinner, Stone,
Ting, Weber, Wieckowski, Williams, Yamada, John A. P�rez
NOES: Achadjian, Allen, Bigelow, Ch�vez, Conway, Cooley, Dahle,
Donnelly, Beth Gaines, Gorell, Grove, Hagman, Harkey, Jones,
Linder, Logue, Maienschein, Mansoor, Melendez, Morrell,
Muratsuchi, Nestande, Olsen, Patterson, Wagner, Waldron, Wilk
NO VOTE RECORDED: Bocanegra, Daly, Fox, Gray, Holden, Perea,
Salas, Vacancy
CONTINUED
AB 10
Page
7
PQ:nl 9/12/13 Senate Floor Analyses
SUPPORT/OPPOSITION: SEE ABOVE
**** END ****
CONTINUED