Welcome to Happening in California, a brief look at political news, insights, and analysis of the world’s fifth-largest economy.

Two weeks ago, the West Hollywood city council approved the highest minimum wage in the country — $17.64 per hour plus annual Consumer Price Index (CPI) adjustments.

For many local governments and labor activists, California’s phased-in $15 minimum wage increase is too little, too late.

Here is what’s happening and why you should pay attention …

Cheers,
Tom Ross | President and CEO | Swing Strategies

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The Big Picture: Before 2012, only 5 local governments in the nation had minimum wage laws. Today there are 53 … and 72 percent are located in California.

In January 2022, California will reach a $15 minimum wage — a 60 percent increase since 2014 …

… but, it won’t stay at $15.

California’s minimum wage will continue to increase annually by the lesser of 3.5 percent or CPI.

However, many view the $15 minimum wage as inadequate …

• SEIU 2015, which represents long-term care workers, is advocating for a $20 minimum wage.
• Governor Newsom’s Future of Work commission recommended the creation of regional wage floors ranging from $25 in Silicon Valley to $19 in Los Angeles.
• SEIU-USWW, which represents more than 20,000 janitors across California, ratified a new contract that includes a $20 minimum wage for many workers.

And it’s not just labor activists pursuing a minimum wage above $15 …

Local governments are becoming increasingly assertive in matters that traditionally would have been left to the state.

Before West Hollywood approved the highest minimum wage in the country, the Bay Area city of Emeryville held the distinction with a minimum wage of $17.13 and indexed to CPI.

To determine a minimum wage specific to their community, local governments are using MIT’s living wage calculator that factors in localized cost of living. With vast regional cost of living differences in California, don’t be surprised to see more local minimum wage ordinances popping up in 2022. ​

The Takeaway: Labor shortages and inflationary pressure, that are particularly acute in California, are having a significant impact on entry-level wages. Even some fast-food restaurants are offering $17 per hour for starting wages.

California is poised to blow past the $15 minimum wage — whether it be local ordinances, a new statewide push, or individual companies responding to worker shortages.

Give us a ring or shoot us an email if you’d like to chat about what’s happening in California.