AB 10: Minimum Wage: One-time Increase and Annual Adjustment

 

Summary

AB 10 would increase the state minimum wage from $8.00 per hour to $8.50 per hour in 2012. It would also adjust the hourly minimum wage on an annual basis according to the rate of inflation. In years of negative inflation, the minimum wage would remain the same.

Purpose

It has been three years since minimum wage workers have been given a raise.

The purchasing power of minimum wage workers declines on an annual basis while the cost of goods and services increase every year. The current minimum wage is inadequate to support a single adult, and grossly inadequate to support a family.

Economists agree that raising the minimum wage will help our economy by generating more consumer spending. When minimum wage workers have more money to spend, they spend it since they cannot afford to save it.

Background

The federal minimum wage was first adopted as part of the Fair Labor Standards Act of 1938 during the Great Depression. The last minimum wage increase in California was January 1, 2008 to a rate of $8.00 per hour.

On January 1st, the minimum wage was raised in seven states, but California wasn’t one of them. According to the National Employment Law Project, raising the minimum wage in those seven states will help nearly 650,000 workers as well as have a positive multiplier effect in local communities.

According to a new study co-authored by economic professors at the University of California at Berkeley, the University of Massachusetts, and the University of North Carolina, raising the minimum wage does not eliminate low-paying jobs in either the short- or long-term.

There are ten states that have minimum wages that are linked to a consumer price index. In October, the Bureau of Labor Statistics reported that the rate of inflation over the previous twelve months to be 1.2 percent.

For more information on this bill, please contact Marva Diaz at (916) 319-2028, email marva.diaz@asm.ca.gov.

 

AB 10: Minimum Wage: One-time Increase and Annual Adjustment
Fact Sheet
Summary
AB 10 would increase the state minimum wage from $8.00 per hour to $8.50 per hour in 2012. It would also
adjust the hourly minimum wage on an annual basis according to the rate of inflation. In years of negative
inflation, the minimum wage would remain the same.
Purpose
It has been three years since minimum wage workers have been given a raise.
The purchasing power of minimum wage workers declines on an annual basis while the cost of goods and
services increase every year. The current minimum wage is inadequate to support a single adult, and grossly
inadequate to support a family.
Economists agree that raising the minimum wage will help our economy by generating more consumer
spending. When minimum wage workers have more money to spend, they spend it since they cannot afford to
save it.
Background
The federal minimum wage was first adopted as part of the Fair Labor Standards Act of 1938 during the Great
Depression. The last minimum wage increase in California was January 1, 2008 to a rate of $8.00 per hour.
On January 1st, the minimum wage was raised in seven states, but California wasn’t one of them. According to
the National Employment Law Project, raising the minimum wage in those seven states will help nearly 650,000
workers as well as have a positive multiplier effect in local communities.
According to a new study co-authored by economic professors at the University of California at Berkeley, the
University of Massachusetts, and the University of North Carolina, raising the minimum wage does not eliminate
low-paying jobs in either the short- or long-term.
There are ten states that have minimum wages that are linked to a consumer price index. In October, the
Bureau of Labor Statistics reported that the rate of inflation over the previous twelve months to be 1.2 percent.