March 29--REPORTING FROM SACRAMENTO -- In a move catapulting California into uncharted national territory, Gov. Jerry Brown announced Monday a six-year plan to boost the statewide minimum wage to $15 an hour, promising that millions of low-wage workers would receive the help they desperately need.
"It's a matter of economic justice. It makes sense," Brown said at a news conference at the state Capitol, surrounded by Democratic leaders of the Legislature and those from some of the state's most prominent labor unions.
The agreement, first reported by The Times on Saturday, would reinforce California's position as having the highest minimum wage of any state. It also sets in motion a series of important political and policy changes. Most pressing, the brokered deal is expected to cancel two separate labor-sponsored efforts at placing a wage hike initiative on the November ballot.
"I'm hoping that what happens in California will not stay in California, but will spread all across the country," Brown said.
The plan, expected to be voted on by the Legislature before the end of the week, would raise the statewide minimum wage by 50 cents on Jan. 1 to $10.50 an hour. From there, it would rise to $11 in 2018 and subsequent dollar-a-year increases ending at $15 on Jan. 1, 2022.
That is a slower timetable than union leaders had proposed in their ballot measure efforts, but an agreement that they said represented real progress.
"This agreement puts a better future in the grasp of average Californians," said Laphonza Butler, president of the statewide council of the Service Employees International Union.
For Brown, the newly minted deal represents an admission that political forces demanding a minimum wage increase were simply too strong to ignore. The governor signed the last statewide increase in 2013, but had suggested any additional increases would be a significant burden on the state as the employer of low-wage care workers for the disabled.
Brown had also previously rejected demands to "index" the minimum wage -- linking its rate to future inflation pressures. The negotiated agreement announced Monday requires minimum wage increases after 2022 as statewide cost-of-living estimates also rise.
Even so, Brown did insist on including ways to stop wage hikes if the economy falters. The agreement allows for a temporary pause in the first few years of boosted salaries if California's unemployment rate rises or if a deficit is projected in future state budgets.
The plan raises the wage "in a way that takes into account the vagaries of the capitalistic economy," Brown said, adding, "This thing is the result of a lot of thinking."
State lawmakers can formally weigh in on the deal as soon as Wednesday.
Key to its passage may be the backing of business-friendly Democrats in the Assembly who have spiked big Brown-supported measures in the past, including a major effort last year to reduce the state's use of oil and gas as part of a broad climate change bill.
Assembly Speaker Anthony Rendon (D-Paramount) said that during a brief closed-door meeting Monday afternoon, his colleagues questioned many aspects of the plan, including the cost-of-living increases and difficulties that nonprofits might have complying with the new rules.
He said a few moderate Democrats already have committed their support but declined to name them. "There does seem to be significant support," Rendon said.
Assemblyman Jim Cooper (D-Elk Grove), the co-leader of the Moderate Caucus, was undecided on the proposal Monday. He said members were concerned about any unintended consequences of the move and its effect on nonprofits.
Similarly, Assemblyman Ken Cooley (D-Rancho Cordova) said he needed to see the actual language of the bill before he could decide whether to support it. He said he had never previously backed a minimum wage deal that included automatic cost-of-living increases.
"I'm just trying to understand personally how the pieces fit together," Cooley said. "I can't say I know where I'm at."
Rendon, who supports the deal, said the plan will have its first hearing in the Assembly Appropriations Committee on Wednesday.
News of the minimum wage agreement is already reverberating across the United States, as lawmakers in other states and presidential candidates have considered the idea of a $15-an-hour wage mandate.
"Raising CA's minimum wage to $15 is a big win for workers and #FightFor15 organizers. I applaud CA and other states' work to raise wages," Democratic presidential candidate Hillary Clinton tweeted late Monday.
"There are absolutely going to be national implications," said Chris Tilly, director of the UCLA Institute for Research on Labor and Employment. "I expect other states to follow suit, and I expect pressure to build for a federal minimum wage increase."
He said New York will likely be the next state to jump in on $15 hourly minimum wage legislation, based on the state's "rivalry" with California for being "forward-thinking." New York is currently considering a minimum wage increase proposal.
Brown, along with legislators and labor leaders, have been privately negotiating the details of the California plan for weeks.
The governor told reporters Monday afternoon that those talks were sparked by the "specter" of the initiatives that were headed to the fall ballot.
A coalition of business groups that formed a campaign committee to oppose a statewide $15 minimum wage ballot initiative said the proposed deal was "overreaching." The committee includes groups such as the California Restaurant Assn., the L.A. Area Chamber of Commerce, the California Hotel and Lodging Assn. and the California Retailers Assn.
"While voters may favor a reasonable minimum wage increase, $15 turns those numbers on their head," California Consumers Against Higher Prices said in a statement. "They realize the real-life implications of the devastating impacts a $15 minimum wage would have on their lives from education cuts, increased costs to seniors, services for the disabled, and the small businesses and jobs in their neighborhood, it goes too far."
Ruben Gonzalez, senior advisor of strategic affairs at the L.A. Area Chamber of Commerce, complained that business was left out of the talks, and asked if there would be hearings or input from the public.
"What it comes down to is we had some late-night deal brokered, unknown, not necessarily all stakeholders in the room," he said.
Tom Scott, state executive director of the National Federation of Independent Business California, had a similar issue. He said there has been a frustrating "lack of information" about the deal, which broke over the Easter holiday weekend.
Gonzalez also said because service industries have small margins, it would be difficult for them to absorb the cost of a large minimum wage increase.
"Everyone wants higher wages for folks, but if you can only raise prices so much ... you're going to be forced to cut hours, cut employees, change your business model and frankly, automate."
The legislative minimum wage proposal makes one concession to small businesses, by allowing those with fewer than 26 workers an additional year to raise wages. The $15-an-hour minimum wage wouldn't apply to those employers until Jan. 1, 2023.
Labor unions successfully won as many as three additional paid sick days for their members who work as in-home care providers. While the agreement allows some possible delays in the rollout of those extra sick days, it represents a significant victory for the unions in their negotiations with Brown and legislative leaders.
But the effect of the minimum wage hike will go much further. The Capitol news conference announcing the deal included a fast-food minimum wage worker, Holly Dias of Humboldt County, who said the boost in her take-home pay would help her raise her 5-month-old son.
"I just want to say thank you," she said tearfully, getting a hug from Brown as she walked away from the podium.
Samantha Masunaga contributed to this report.
john.myers@latimes.com
liam.dillon@latimes.com
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