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Bill Elevates State Minimum Pay to $8 by 2008

September 13, 2006|Marc Lifsher

Gov. Arnold Schwarzenegger signed legislation Tuesday to increase California's minimum wage to $8 an hour over the next 15 months.

Question: When does it take effect?

Answer: A 75-cent-an-hour increase takes effect Jan. 1. It will raise California's minimum wage to $7.50 an hour from $6.75. On Jan. 1, 2008, there will be another increase, to $8 an hour, or $16,640 annually.

Q: How many workers will get this raise?

A: About 1 million workers of the state's 17.75 million workers.

Q: Is there a federal minimum wage?

A: The federal minimum wage is $5.15 an hour and has not been raised since 1997. States are allowed to exceed that. The federal government also has a sub-minimum wage of $4.25 an hour for teenage workers, during their first 90 days on the job.

Q: How does California rank among other states?

A: On Jan. 1, California at $7.50 an hour will rank fourth in the nation, behind Washington state at $7.80, Oregon at $7.67 and Connecticut at $7.65. (Levels for Washington and Oregon are estimates; they automatically increase the wage each year based on the cost-of-living index.)

Q: How much will this cost California employers?

A: Business groups, including the California Chamber of Commerce, the California Restaurant Assn. and the National Federation of Independent Businesses, opposed the increase partly because of the cost to employers. Statewide, payrolls could go up by $2.6 billion a year when the second step of the increase takes effect in January 2008.

-- Marc Lifsher

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