California lawmakers and unions reach $15-an-hour minimum wage deal

Lawmakers and union leaders in California have reportedly reached a tentative deal to gradually raise the state's minimum wage to $15 over six years. The agreement would raise the state's minimum wage to $10.50 an hour next year, local newspapers reported.

According to The Los Angeles Times, the deal was confirmed on 26 March by sources close to the negotiation but is not expected to be formally announced until 28 March by Governor Jerry Brown. The compromise on minimum wage, which has engulfed the entire US during a presidential election year, could prevent a costly campaign to bring the issue to voters in November.

Documents obtained by The Times reveal the compromise would raise the state minimum wage to $10.50 on 1 January 2017, then raise it to $11 in 2018 and then boost it $1-per-year through 2022. However, businesses with less than 25 employees would have an additional year to comply, meaning their employees would not receive $15 an hour until 2023.

The Times noted that future statewide minimum wage increases would be tied to inflation, but governors would have the power to temporarily block some of the initial increases in times of an economic downturn.

Brown raised the minimum wage in 2013 but was resistant to revisit the issue until labour unions were prepared to take the issue to the voters. The Times reported that the first of two union-sponsored proposals, circulated by the Service Employees International Union and the United Healthcare Workers West, qualified for the 8 November ballot earlier in March.

"If a California minimum wage bill passes and is signed into law by the governor, we will take a careful look at it and our executive board will decide what to do with our ballot initiative," Steve Trossman, the union's public-affairs director, told The Wall Street Journal.

California state legislature could vote on the deal as soon as the end of next week by amending an existing bill that has been on hold since 2015. The Huffington Post reported that in order to pass in the legislature, the proposal would have to gain the support of moderate Democrats, who have blocked key legislation backed by Brown and the party's more liberal leaders.

The "Fight for 15" movement has been addressed by both Democratic presidential candidates ahead of the general election, but the deal in California could force Hillary Clinton and Bernie Sanders to be more aggressive. The WSJ noted that Sanders has included a $15-an-hour federal minimum wage a pillar of his campaign, while Clinton has advocated for a $12-an-hour federal minimum wage. The minimum wage at the federal level has been $7.25-an-hour since 2009.

However, the proposed wage hikes have met resistance from business groups and Republicans, who claim the raise would lead to fewer employment opportunities for low-skilled Americans. "Let's start by calling this irresponsible," Michael Saltsman, research director at the Employment Policies Institute, told the Huffington Post. "When you talk about these really massive jumps it's no longer an impact at the margin, it's the sort of thing that could be the difference between a business staying open and closing."

An August 2015 poll by Field Research Corp revealed 68% of Californians were in favour of raising the minimum wage to $15 by 2021. Los Angeles and San Francisco have already chosen to phase in $15-an-hour minimum wages in the upcoming years.