Minimum-wage workers in California would see their first raises in six years under a bill that passed the state Assembly on Thursday.
The measure from Assemblyman Luis Alejo, D-Watsonville, would increase the state's minimum hourly wage to $8.25 next year from the current $8. It would rise to $9.25 by 2016 and would be adjusted for inflation in following years.
Democratic supporters say the minimum wage has not kept pace with the rising costs of food, gasoline and other necessities. Nevada, Oregon and Washington have set their minimum wages higher than California, Alejo said.
"The last time the minimum wage was increased in California, gas was at $3.25 a gallon in this state," he said. "I don't know about you, but I haven't seen gas prices at that level for a very long time."
Opponents argue that minimum-wage jobs are often held by teenagers or those who soon move on to higher-paid positions. Alejo said his mother-in-law has earned the minimum wage at one of her jobs for 20 years.
Business leaders oppose the bill, which they say would burden employers and force them to cut jobs. A study by the National Federation of Independent Business said more than 68,000 jobs could be lost during the next decade as a result.
"Small-business owners at a minimum get a double whammy on Jan. 1" when various taxes and fees from the federal health care law also will go into effect, said John Kabateck, executive director for the state's NFIB chapter.
Different regions of the state face different economic challenges, making a higher wage reasonable in more expensive areas but harmful in areas with a lower cost of living, said Assemblyman Curt Hagman, R-Chino Hills.
"If we do a blanket change like this, it puts us out of competition with other states," Hagman said.
Federal law sets a minimum wage of $7.25 per hour. Nineteen states and the District of Columbia have set their minimum wage levels higher than the federal standard.
The Assembly approved AB10 on a 42-24 vote, with Assemblyman Ken Cooley, D-Rancho Cordova, joining Republicans in opposition. It now heads to the Senate.