SACRAMENTO, Calif. — Democrats in California have agreed to delay a minimum wage increase for about 426,000 health care workers to help balance the state’s budget.
The increase was supposed to start on July 1. The agreement, announced Saturday and which must still be approved by the state Legislature, would delay that increase until Oct. 15 — but only if state revenues between July and September are at least 3% higher than what state officials have estimated.
If that doesn’t happen, the increase will not start until January at the earliest.
The minimum wage for most people in California is $16 per hour. Gov. Gavin Newsom signed two laws last year that increased the minimum wage for two groups: Fast food workers and health care employees.
The new fast food minimum wage is $20 per hour and took effect on April 1. The new health care worker minimum wage is $25 per hour and was slated to be phased in over the next decade. The first increase was supposed to begin on July 1.
But unlike the fast food minimum wage, the increase for health care workers impacts the state’s budget. That’s because California employs some health care workers and also pays for health benefits through its Medicaid program.
The Newsom administration had previously said the minimum wage increase would cost the state about $2 billion. But if delayed until January, the increase will cost the state’s general fund about $600 million — a figure that would rise yearly to reflect scheduled increases until it reaches $25 per hour for most health care workers.
“Of course, workers are disappointed that not every low-wage worker in health care will receive raises this summer as the law initially scheduled,” said Dave Regan, president of Service Employees International Union-United Healthcare Workers West. “But we also recognize and appreciate that legislative leaders and the Governor listened to us as we mobilized and spoke out this year to insist that, despite a historic budget deficit, California’s patient care and healthcare workforce crisis must be addressed.”
The agreement is part of a plan to close an estimated $46.8 billion deficit in the state’s budget. Newsom and the Democrats who control the state Legislature have been negotiating on how to close the shortfall.
The agreement they announced Saturday includes $16 billion in budget cuts, including a $110 million cut to scholarships for prospective college students from middle-income families and $1.1 billion in cuts to various affordable housing programs.
The agreement would pull $5.1 billion from the state’s savings account while delaying $3.1 billion in other spending and shifting $6 billion in expenses to other funds.
But Newsom and lawmakers agreed to abandon some previously proposed budget cuts, including one that would have stopped paying for people to care for some low-income disabled immigrants who are on Medicaid.
“This agreement sets the state on a path for long-term fiscal stability — addressing the current shortfall and strengthening budget resilience down the road,” Newsom said.
Senate President Pro Tempore Mike McGuire called it a “tough budget year,” but said elected officials were able “to shrink the shortfall, protect our progress, and maintain responsible reserves.”
Democratic Assembly Speaker Robert Rivas said the Assembly “fought hard to protect the public services that matter most to Californians.”
California Democrats have made the controversial decision to delay a scheduled minimum wage increase for health care workers in order to help balance the state’s budget. The move has sparked debate among lawmakers, advocates, and healthcare workers themselves.
The minimum wage increase, which was set to take effect on January 1st, would have raised the minimum wage for health care workers in California to $15 per hour. However, facing a budget deficit of over $54 billion due to the economic impact of the COVID-19 pandemic, Democrats in the state legislature decided to postpone the wage hike in an effort to save money.
While some argue that delaying the minimum wage increase is necessary to prevent further strain on the state’s already struggling economy, others believe that it is unfair to prioritize budget concerns over the well-being of essential workers who have been on the frontlines of the pandemic.
Health care workers, who have been risking their lives to provide care to patients during the pandemic, are understandably frustrated by the delay in their wage increase. Many feel that they are being undervalued and taken advantage of, especially considering the increased workload and risks they have faced in recent months.
Advocates for health care workers have also spoken out against the decision, arguing that these workers deserve fair compensation for their hard work and dedication. They point out that many health care workers are already struggling to make ends meet on their current wages, and delaying the minimum wage increase only adds to their financial burden.
On the other hand, supporters of the delay argue that the state simply cannot afford to implement the wage increase at this time. With revenues down and expenses up due to the pandemic, tough decisions must be made in order to keep the budget balanced and prevent further financial crisis.
Ultimately, the decision to delay the minimum wage increase for health care workers in California highlights the difficult choices that lawmakers are facing in the wake of the COVID-19 pandemic. While balancing the budget is important, it is crucial that the needs and well-being of essential workers are not overlooked in the process. It remains to be seen how this delay will impact health care workers and the state’s economy in the long run.
