BILL ANALYSIS �
AB 10
Page 1
( Without Reference to File )
CONCURRENCE IN SENATE AMENDMENTS
AB 10 (Alejo)
As Amended September 11, 2013
Majority vote
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|ASSEMBLY: |45-27|(May 30, 2013) |SENATE: |26-11|(September 12, |
| | | | | |2013) |
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Original Committee Reference: L. & E.
SUMMARY : Increases the state's minimum wage as specified.
The Senate amendments :
1)Eliminate the provisions of the bill that require the minimum
wage to be indexed annually for inflation.
2)Provide that the minimum wage shall be increased as follows:
a) On and after July 1, 2014, the minimum wage shall be
$9.00 per hour.
b) On and after January 1, 2016, the minimum wage shall be
$10.00 per hour.
FISCAL EFFECT : According to the Senate Appropriations
Committee, the Department of Industrial Relations (DIR) 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. In addition, this bill would result in increased salary
costs of $585,000 in 2013-14, rising to $16.3 million in 2017-18
(General Fund and various special funds).
COMMENTS : According to the author, the minimum wage has not
kept pace with the cost of living and has equated to a decrease
in purchasing power. The author states that while the cost of
goods and services increase every year, the purchasing power of
minimum wage workers declines on an annual basis. According to
the author, "we have created a system where we pay workers less
but need them to spend more. That causes middle class families
AB 10
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to fall down the economic ladder. It's the reason our middle
class is shrinking and our income gap is now wider than ever."
Writing in support, California Labor Federation (CLF) states
this bill will strengthen California's minimum wage. According
to CLF, "not only are those at the bottom of the wage scale
mired in poverty, over recent decades the real value of their
earnings has collapsed," leaving workers worse off today. In
support of this, CLF cites that the California Budget Project
has calculated that between 1968 and 2008, the purchasing power
of California's minimum wage fell 24.8 percent.
The California Chamber of Commerce (Chamber), along with a
coalition of employers, opposes this bill and argues that it
will provide a 25% increase in the minimum wage over the next
three years that will drive up the costs for all businesses in
California, far worse than any predicted rate of inflation. The
Chamber also argues that minimum wage increases affect more than
just the hourly rate of pay of employees. It also drives up
exempt employee salaries, workers' compensation costs, uniform
and tool reimbursements, overtime and consumer prices.
Analysis Prepared by : Ben Ebbink / L. & E. / (916) 319-2091
FN:
0002801