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March 29, 2016

Governor Brown, Labor Unions Announce Minimum Wage Deal

Yesterday, Governor Brown, select members of the Legislature and labor union leaders announced an agreement to make California the first state in the nation to reach the $15 per hour minimum wage mark. This deal comes on the heels of a 2013 law that raised the minimum wage from $8 to $10 per hour effective the beginning of this year. The new plan will continue to raise the minimum wage as follows:

Wage 26 or More Employees 25 or Fewer Employees
$10.50 per hour January 1, 2017 January 1, 2018
$11.00 per hour January 1, 2018 January 1, 2019
$12.00 per hour January 1, 2019 January 1, 2020
$13.00 per hour January 1, 2020 January 1, 2021
$14.00 per hour January 1, 2021 January 1, 2022
$15.00 per hour January 1, 2022 January 1, 2023

Once the minimum wage reaches $15 per hour for all businesses in 2023, wages will then be increased each year up to 3.5 percent (indexed) for inflation as measured by the national Consumer Price Index.

The plan does provide a “safety valve,” which will allow the Governor to pause the next year’s wage increase for one year if there is a forecasted budget deficit or poor economic conditions. This so-called “off-ramp” can only be used twice until the $15 per hour level is reached, after which it no longer applies.

“Governor Brown and the labor unions have chosen to ignore economic reality in striking this deal,” said Western Growers President and CEO Tom Nassif. “The $15 minimum wage will force many fresh produce companies to reduce the working hours of their employees and replace as many as possible with automation or outsourcing to other states and countries.

“California’s regulatory apparatus is picking apart an industry that provides fresh, healthy food to its people and to the world. Forcing the minimum wage higher by 50 percent, on top of the 20 percent increase just completed, is just the latest blow to families that want to stay in California but can’t project a sustainable economic future here.

“Keep in mind, we don’t just compete with California growers, we compete with a world that is not burdened by California’s ever-expanding regulations and constant wage increases. Inexpensive foreign food imports are eating away our future.”