Last October, Gov. Gavin Newsom signed into law Senate Bill 525, which raises the minimum wage to $25 per hour for nearly all health care workers. The law would impact an array of workers, including nurses, caregivers, groundskeepers, medical coders, call center representatives, food service workers, and janitors. Newsom’s administration says it wants to delay the pay increase because of its potential to worsen his state’s budget crisis. Currently, the state’s minimum wage is $16 per hour. Under the new law, the minimum wage for the healthcare sector would increase to between $18 and 23$ per hour, depending on the size and type of healthcare provider. By 2028, nearly all healthcare workers would be at the $25 per hour pay scale. Lawmakers this week moved to change the language in the legislation and replace it with a bill that would push back the date for the first round of pay increases from June 1 to July 1. SB 525 is one of the most expensive laws California has passed. The price tag for the minimum wage increase has an estimated cost of $4 billion during the 2024-25 fiscal year alone. This comes at a time when California faces a $45 billion budget deficit which is projected to balloon to $56 billion over the next two fiscal years. The effort to push back the start of the minimum wage increase also comes weeks after Newsom revised a $288 billion budget proposal that required the elimination of 10,000 currently vacant state jobs. Supporters of the bill say it is much needed legislation that will help workers who have now counted on the increase. Opponents argue that it's shortsighted and will ultimately raise costs for patients. “Mr. Newsom is proposing to tie health worker minimum-wage increases to the state’s general fund revenue and to exempt state facilities,” wrote the Wall Street Journal Editorial Board. “But once capital-gains revenue picks up again, California’s private healthcare providers will be stuck paying for the wage mandate, which they will ultimately pass on to patients. Far better to repeal the $25 wage minimum en toto.” The Board added, “California’s wage minimums are another illustration of how progressive mandates boomerang.” Under California law, the legislature must approve budget bills by midnight on July 15, otherwise they don’t get paid. Newsom has suggested adding an annual “trigger” to make wage increases subject to state funding availability. State Sen. María Elena Durazo, a Democrat, who authored SB 525, said she wants to “make sure that we cover all our bases in the context of the current of the budget.” Durazo and her allies remain opposed to changing the minimum wage law, despite the hefty price that comes with its enactment. “I can just tell you that my conversations are all about keeping the wage raise for those workers,” she said. “They’ve been counting on it. They’re depending on it. We voted for it.”California lawmakers are seeking to delay the implementation of a minimum wage increase for health care workers as the state continues to struggle with a crippling budget deficit.
