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’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.
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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.
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.
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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.
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.