Inflation triggers California minimum wage increase in 2023

Inflation triggers California minimum wage increase in 2023

A new minimum wage will come into effect in California next year, triggered by rising inflation.

Gov. Gavin Newsom’s administration announced Thursday that the state minimum wage will rise to $15.50 an hour.

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The increase is mandated by a state law passed in 2016.

The law says the minimum wage must rise to $15.50 an hour if inflation rises more than 7% between fiscal years 2021 and 2022.

California Gov. Gavin Newsom (AP Photo/Rich Pedroncelli, file, pool)

California’s Treasury Department said inflation for fiscal 2022 will be 7.6% higher than last year, sparking the spike.

inflation Cooled in April for the first time in months on an annualized basis, but rose more-than-expected as supply chain restrictions, the Russian war in Ukraine and strong consumer demand continued to keep consumer prices near a 40-year high.

INFLATION RISES 8.3% IN APRIL AND FLOWS NEAR A 40-YEAR HIGH

California lawmakers voted to raise the minimum wage to $15 an hour in 2016, but the increase was phased in over several years.

The minimum wage is currently $15 per hour for companies with 25 or more employees and $14 per hour for companies with 25 or fewer employees.

California has about 3 million minimum wage workers.

Gov. Gavin Newsom’s administration announced on Thursday, May 12, 2022 that rising inflation will trigger an automatic increase in the California minimum wage to $15.50 an hour next year. (AP Photo/Rich Pedroncelli)

In a preview of the budget proposal, Newsom’s plan calls for sending up to $800 checks to car owners to help offset this year’s record-high gas prices despite opposition from Democrats in the Legislature. That would be $400 per car for a maximum of two cars per owner — plus another $750 million to give everyone free public transit travel for three months.

NEWSOM’S PLAN FOR FREE FUEL CARDS WILL DRIVE PRICES AND INFLATION EVEN HIGHER, EXPERT WARNS

Democratic leaders prefer sending $200 checks to low- to middle-income taxpayers and their families instead.

In California, average gas prices hit a record high of $5.91 a gallon in March.

On Thursday, May 12, 2022, Gov. Gavin Newsom’s administration proposed sending $1,000 in checks to hospital and nursing home workers in recognition of their dangerous work during the pandemic. (AP Photo/Jae C. Hong, file)

The proposal also unveiled a new plan to send checks for at least $1,000 to 600,000 hospital and nursing home workers in recognition of their dangerous work during the pandemic.

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Newsom also proposed $2.7 billion in new spending Thursday to fully fund the state’s Rent Assistance Program.

The Associated Press contributed to this report.

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