Koretz minimum wage bill advances

January 23, 2002
Santa Paula News

Legislation by Assemblyman Paul Koretz (D-West Hollywood) to guarantee annual cost of living increases in the state’s minimum wage was approved January 9 by the Assembly’s Labor and Employment Committee on a vote of 5-1. Assembly Bill 181 would protect the purchasing power of the minimum wage from erosion due to inflation.

Legislation by Assemblyman Paul Koretz (D-West Hollywood) to guarantee annual cost of living increases in the state’s minimum wage was approved January 9 by the Assembly’s Labor and Employment Committee on a vote of 5-1. Assembly Bill 181 would protect the purchasing power of the minimum wage from erosion due to inflation.“As chair of the Assembly Labor Committee, it is my goal to champion the cause of working men and women in California, particularly those hard workers who are struggling to make ends meet,” said Assemblyman Koretz. “Our state’s working families have lost ground for decades. AB 181 is a modest step on their behalf.”The minimum wage increased to $6.75 an hour on January 1st. However, no further increases are scheduled. The Industrial Welfare Commission is presently considering a further increase, but could not put any increase into effort prior to 2004.The purchasing power of the minimum wage declined 31 percent from 1968 to 2000, prior to the most recent increases.Under Koretz’s bill there would be annual increases in the minimum wage every January 1st tied to the rate of inflation.
An employee working full-time at the current minimum wage of $6.75 per hour receives $14,040 per year, from which social security and other taxes are deducted. If the inflation rate as of this September were unchanged from present levels, under Koretz’s bill there would be a 15˘ per hour increase in the minimum wage on January 1, 2003, to $6.90 per hour.A review of research in this area released in June of 2000 by the California Budget Project concluded that higher minimum wages have increased earnings of lower-income workers without undermining job growth in California. This finding is consistent with the experiences of other states, where moderate minimum wage increases have not led to job losses.By enacting AB 181, California would be following the lead of the State of Washington, which automatically adjusts its minimum wage to match inflation.



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