California Lawmakers Boost State Minimum Wage to $10 an Hour

California lawmakers sent Governor Jerry Brown a measure to increase the minimum wage 25 percent to $10 an hour. The Democrat has said he’ll sign the bill.

The measure, passed yesterday, would raise the basic minimum rate, now $8 an hour, to $9 in July 2014 and $10 in January 2016. That would be the highest in the U.S. if other states hold their rates steady.

A $10 minimum wage would pump $2.6 billion into the world’s ninth-biggest economy, Assembly Speaker John Perez, a Los Angeles Democrat, said in a statement. It will also help workers by giving them more money to spend, Senator Marty Block, a San Diego Democrat, told the Associated Press

“They’re not going to put it into a hedge fund,” he said.

California last boosted the minimum wage in 2008, when Republican Arnold Schwarzenegger was governor. Business groups, such as the California Chamber of Commerce, have said the bill would stifle job growth.

“We have it tagged as a job-killer, given the increased costs businesses will be faced with,” Jennifer Barrera, policy advocate for the chamber, said before the vote, according to the AP.

Only eight U.S. states, including California, pay $8 per hour or more. Washington currently pays $9.19 an hour and adjusts it annually based on inflation.

Congress last voted to raise the federal minimum wage in 2007, and President Barack Obama’s call to raise it to $9 an hour from $7.25 has gone nowhere with lawmakers.

‘Big Help’

Jot Condie, president of the California Restaurant Association, told the Los Angeles Times that the legislation was “an unprecedented wage hike” for an industry that is the state’s second-biggest private employer, with more than 1.4 million workers. While he said the measure will result in fewer hours and reduced hiring Louis Benitez, a waiter at the J.W. Marriott Hotel in Los Angeles, said he was glad the bill passed.

“It would be a big help to get a little bit more money per hour,” Benitez, who also said earns tips, told the newspaper.

To contact the reporter on this story: Michael B. Marois in Sacramento at mmarois@bloomberg.net

To contact the editor responsible for this story: Stephen Merelman at smerelman@bloomberg.net

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