An $18 minimum wage petition is gaining traction in California, and its implications for hourly workers.

After the federal $15 minimum wage proposal fell through, Californians may have the opportunity to vote on a higher minimum hourly wage.

The Living Wage Act of 2022 campaign started collecting signatures in February with the goal of raising the state's minimum wage to $18. If the campaign gathers 700,000 signatures, it will be on the November ballot in California.

According to Joe Sanberg, an entrepreneur and sponsor of the legislation, the purchasing power of the minimum wage decreases over time. As a result, there is a need to continually advocate for an increased minimum wage to ensure that working individuals can meet their basic necessities.

Despite facing challenges, small business owners remain optimistic. Inflation has reached its highest point in 40 years. Raising interest rates could provide relief. This company has discovered a solution to employee burnout: a four-day workweek.

If enacted, the legislation would incrementally raise the minimum wage in California from $15 to $18 by 2025. Specifically, it would increase to $16 in 2023 and $17 in 2024. This provision would only apply to businesses with more than 25 employees, while those with fewer than 25 employees would reach $17 an hour in 2025.

According to Sanberg, most full-time workers in America live on the brink of financial ruin, and a higher minimum wage would aid people of color and essential workers.

Hourly workers will get a boost

The measure, if successful, will provide a raise of over $6,000 per year to approximately 5.5 million people in California. The state's minimum wage was raised to $15 per hour on January 1, 2022, with some areas setting their own minimum wages higher.

The hike would also apply to tipped workers and continue to be adjusted to keep pace with the cost of living beyond 2025.

While many businesses have increased wages to attract workers during the Great Resignation, it is crucial to establish a minimum wage policy, according to Saru Jayaraman, president of One Fair Wage.

"It's crucial to increase wages immediately; this is a pivotal moment when workers are no longer accepting $15 an hour as a fair wage," she stated.

To ensure that workers are protected from pay cuts due to inflation, it is crucial to consistently raise compensation, as seen in the current economic climate where inflation has reached its highest point in 40 years. While wages have increased as a result, a law is necessary to safeguard workers' pay if inflation decreases in the future, according to Jayaraman.

The big picture

In the beginning of the year, 26 states, including California, increased their minimum wage to $15 per hour.

President Joe Biden was able to raise the minimum wage to $15 for all federal contractors, despite the initial exclusion of a $15 federal minimum wage in Covid-relief legislation.

Not all agree to increasing the minimum wage. Democrats abandoned the plan to raise the federal minimum wage following an amendment from Sen. Joni Ernst, a Republican from Iowa. Ernst contended that doing so during the Covid pandemic would harm small businesses already struggling.

The report from the Congressional Budget Office in 2021 stated that if the minimum wage is raised to $15 an hour by 2025, it could result in 1.4 million job losses. On the other hand, it would also help lift 900,000 people out of poverty.

The federal minimum wage will gradually increase to $15 an hour by 2025 under the Raise the Wage Act, which has passed in the House but is still pending in the Senate.

Since 2009, the federal minimum wage has not been increased, despite the fact that many workers still cannot afford the cost of living in the U.S., according to a recent CNBC analysis of cost-of-living data compiled by researchers at the Massachusetts Institute of Technology.

Advocates for higher wages are urging state-level organization, according to Jayaraman. One Fair Wage aims to increase the minimum wage in 25 U.S. states by 2026, she said. A majority of Americans support higher wages, and several states have successfully passed legislation to raise worker pay.

Since Congress isn't moving, we decided to act," she stated. "You need to seize the opportunity.

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