California Affordability Crisis Deepens, Living Wage Law Overturned

What does it really take to stay afloat in California? A state minimum wage campaign initiative could spark serious conversation around this topic — whenever it finally hits the ballot.

The Living Wage Act was excluded from the November election due to a failed initiative process, but the basics are intriguing: an increase in the minimum wage for workers to $18 an hour by 2025, with small businesses having until 2026 to comply. This would be well ahead of the state’s current schedule, under which the inflation-adjusted minimum will increase to $15.50 in 2023 and is expected to reach around $16.50 by 2025.

It’s not a small difference. Raising the minimum wage to $18 increases earnings by more than 5 million California workers, or 26% of the state’s workforce, according to a study by the UC Berkeley Labor Center. It would lift 3.5 million people above the federal poverty level, per year guidance note by Michael Reich, Co-Chair of Berkeley’s Center on Wage and Employment Dynamics.

They are mostly workers of color and women, two groups whose compensation has historically lagged in the labor market because they hold millions of low-wage jobs across the state.

“We won’t stop pushing for a better minimum wage for California workers,” said Anna Bahr, Yes spokesperson on the California Living Wage Act. “It’s too critical a problem to just wait for it.”

Still, $18 should be no more than a starting point, if the idea is to pay a worker enough to meet even basic needs. “Obviously, $18 an hour isn’t a living wage for most people in California, unless they’re single and in a very specific part of the state,” Bahr said. “We have no illusions about the cost of living here.

MIT’s Living Wage Calculator removes such illusions. Created in 2004, the economic modeling program takes into account location-specific costs for housing, food, transportation, health insurance, child care and other necessities, and estimates what a worker should earn for meeting these basic needs while maintaining independence. (no government assistance).

For two adults with one child living in California, only one worker in that household would have to do $40.78 per hour under the MIT model. If both adults were working, the figure would be about $24 per hour per adult. That’s a statewide average, of course; both adults with one child, one working adult the figure is $41.47 in Los Angeles County and $53.63 in San Francisco County, while in Shasta County it drops to 34 $.64.

So there are a lot of variations – but all of them well above the level of a minimum wage. And while in some ways these are two different conversations, they do come together when it comes to determining what an employer should at least be required to pay their workers.

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The $18 an hour proposed by the Living Wage Act has not been saved. Bahr said the group, led and funded by LA startup investor Joe Sanberg, surveyed a range of hourly wages up to $24, “and $18 was kind of the point. ideal where corporations could handle it and people from all sides of the political spectrum were open to it.

This agrees with the analysis done by the Berkeley Labor Center. Enrique Lopezlira, director of the center’s low-wage work program, said researchers there have determined that anyone who earns less than two-thirds of the median income in a given region of California should be defined as a low-wage worker. salary. In 2021, that figure was $18.02 per hour.

Voters certainly won’t have a chance to address the proposal this fall, after a Sacramento County judge ruled that its supporters missed a deadline submit enough valid signatures to qualify. (Sanberg and his team argued that the secretary of state’s muddled instructions led to mistakes.) The measure has already been approved for the 2024 ballot, but Bahr said the group would pursue a legislative path in the interval.

If the stakes seem high, that’s because they are. Workers affected by minimum wage in California are mostly adults, not teenagers. They earn a significant portion of their family income. They are working in the kinds of essential jobs – catering, agriculture, transportation, hospitality and catering – that were devastated by the early months of the pandemic and whose employers have yet to fully rebound.

Maria Hernandez, spokesperson for UNITE HERE Local 11 in Southern California, said of the 13,000 hotel workers represented by the union there, only about 11,000 have been able to return to work. In multiple interviews with Capital & Main over the past two years, many of these workers explained that they had lost whatever savings they had trying to survive prolonged mass layoffs in the industry. (Disclosure: UNITE HERE is a financial backer of Capital & Main.)

The economic fate of many people of color rests on pay scales set by a locality or the state. The Labor Center study found that although Latino workers make up 40% of the California workforce, they would make up 55% of workers affected by an $18 wage increase.

For the more than 5 million workers affected, such a decision would constitute a 5% increase in their income, or about $1,349 more per year, the center estimates. At $18 an hour, nearly 16% of the Los Angeles County workforce would get a raise, over 11% in Orange County and over 12% in San Diego County.

We know this is different from a real living wage,” Lopezlira said. “But it’s also different from a pittance.” It’s the wafer-thin margin that millions of Californians live on — and it’s why every discussion of the state’s minimum wage matters.

This article was originally published by Capital and main.

Michael A. Bynum