Nicole Rice

Dual minimum wage initiatives battle on

By Nicole Rice, Policy Director, Government Relations

Capitol Update, Feb. 5, 2016

California voters are one step closer to having to decide if the state's economy can endure another serial wage increase.

Last month, members of SEIU-United Healthcare Workers West (SEIU-UHW) reportedly submitted 600,000 signatures to their local election officials for verification in order to qualify their minimum wage acceleration initiative for the November 2016 ballot. Officials have until early March to review the validity and certify the signatures.

Meanwhile, proponents of the competing measure, sponsored by SEIU State Council – a warring faction within the same organization – are continuing their efforts gathering signatures, reportedly offering lucrative compensation to those collecting names.

For the most part, the two initiatives are extremely similar in language and intent. Both seek to raise the minimum wage sequentially to $15 an hour by 2021 with automatic future increases that adjust with inflation. The State Council measure, however, also proposes to amend the state's new paid sick leave law by expanding the benefit from three days to six and adding In-Home Support Services (IHSS) workers to the law. These workers were removed by the Governor from the implementing legislation of the current law due to the significant cost impact on the State General Fund if they were covered.

While the Governor has yet to give an official position on either initiative, he continues to reiterate the significant long-term fiscal impact such an increase would have on the state. According to his 2016-2017 State Budget Summary, an increase to $15 an hour could cost the state over $4 billion by 2021 and potentially lead to a cycle of recurring deficits.

Other policy makers don't share the Governor's fiscal concerns. Soon-to-be gubernatorial candidate Gavin Newsom recently declared his support for both measures, along with State Controller Betty Yee and several State Legislators including congressional candidates Assembly Member Roger Hernandez and Senator Isadore Hall.

Whether Californians are willing to support a minimum wage increase as high as $15 an hour will be a key question in the campaign if either or both measures qualify. The risk of defeat is even greater with both proposals on the ballot.

Initiatives that are certified as eligible for the November ballot have 131 days before actually appearing on the ballot, leaving plenty of time for the two opponents to consider how they move forward to ensure success.

Historically, CMTA has opposed legislative minimum wage proposals with inflation triggers that put increased pressure on wages and other costs; do not allow for a corresponding adjustment in times of economic downturn; and fail to consider the additional costs manufacturers will face in the near future, including higher energy costs, regulatory fees and costs related to inflexible labor policies that stifle growth and innovation. We will continue to monitor the developments of these initiatives along with other affected stakeholders. 

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