California Minimum-Wage Hike Measure Sent to Governor
Gov. Arnold Schwarzenegger has until Sept. 30 to decide whether to sign or veto a bill that would raise California’s minimum wage to $7.75 an hour during the next two years.
Currently, the state’s hourly minimum wage is $6.75. It hasn’t changed since Jan. 1, 2002, when it was raised 50 cents.
Although Schwarzenegger has said he would veto the bill passed by the state Assembly on Aug. 23, the proposal has caused concern in the apparel and retail industries.
“It would hurt really badly,” said Jimmy Macias, owner of Ja-Mar Apparel Manufacturing Co., a garment contractor in Irwindale, Calif., that makes women’s pull-on pants for Sears, Roebuck & Co. Most of his workers’ wages are based on piece work or on the number of garments sewn in an hour. With that method, most of his employees make more than the minimum wage. If Schwarzenegger signs the bill, Macias would raise the piece-work rate for his employees to keep their pay the same percentage above minimum wage as it has been.
Apparel companies such as Vernon, Calif.–based Karen Kane Inc. would end up paying their contractors a little more to produce a dress or a pair of pants but probably would not pass the cost on to their retail accounts. Clothing prices have been declining in recent years as more goods are made overseas in low-wage, developing countries.
“We can’t raise our prices to the retailers. It wouldn’t even be part of the consideration,” said Lonnie Kane, president of Karen Kane.
The hardest-hit industries would be restaurants and retailers. Eateries, department stores and specialty emporiums often start their entry-level personnel at minimum wage.
“It just makes it a more expensive place to do business,” said Bill Dombrowski, president of the California Retailers Association in Sacramento, Calif.
California businesses have been hard hit in recent years with increases in workers’ compensation insurance costs, health insurance benefits and rising energy costs.
“I don’t think this is the right time,” said Ilse Metchek, executive director of the California Fashion Association in Los Angeles.
She noted that the federal government is thinking about raising the federal minimum wage from $5.15 an hour to $7 an hour. “Either way,” she said, “chances are the minimum wage is going to go up.” —Deborah Belgum
