California Democrats agree to delay minimum wage increase for healthcare workers to help balance budget

SACRAMENTO, California – Democrats in California agreed to postpone a increase in the minimum wage for about 426,000 health care professionals to help balance the state budget.

The increase was supposed to start on July 1st. The deal, announced Saturday and which still needs to be approved by the state Legislature, would delay that increase until Oct. 15 — but only if state revenues between July and September are at least 3% higher than what state officials estimated.

If this does not happen, the increase will only begin in January at the earliest.

The minimum wage for most people in California is $16 per hour. Gov. Gavin Newsom signed two laws last year that raised the minimum wage for two groups: fast food workers and health care employees.

The new fast food minimum wage is $20 per hour and came into force on April 1. The new minimum wage for healthcare workers is $25 per hour and was scheduled to be phased in over the next decade. The first increase was supposed to start on July 1st.

But unlike the fast food minimum wage, the raise for healthcare workers has an impact on the state budget. This is because California employs some healthcare professionals and also pays healthcare benefits through its Medicaid program.

The Newsom administration has previously said the minimum wage increase would cost the state about $2 billion. But if delayed until January, the increase would cost the state’s general fund about $600 million — an amount that would increase annually to reflect scheduled raises until it reaches $25 an hour for most health care workers.

“It’s clear that workers are disappointed that not all low-wage healthcare workers will receive raises this summer as originally envisioned under the law,” said Dave Regan, president of the Service Employees International Union-United Healthcare Workers West. “But we also recognize and appreciate that legislative leaders and the Governor listened to us as we mobilized and spoke out this year to insist that despite a historic budget deficit, California’s patient care and healthcare workforce crisis must be addressed.”

The agreement is part of a plan to close an estimated $46.8 billion deficit in the state budget. Newsom and Democrats who control the state Legislature I’ve been negotiating on how to close the deficit.

The deal announced Saturday includes budget cuts of $16 billion, including a $110 million cut in scholarships for prospective college students from middle-income families and $1.1 billion in cuts to several affordable housing programs. affordable prices.

The deal would remove $5.1 billion from the state’s savings account, while delaying $3.1 billion in other spending and shifting $6 billion in spending to other funds.

But Newsom and lawmakers agreed to abandon some previously proposed budget cuts, including one that would have stopped paying people for care for some low-income disabled immigrants who are on Medicaid.

“This agreement puts the state on a path to long-term fiscal stability – addressing the current deficit and strengthening fiscal resilience in the future,” Newsom said.

Senate President Pro Tempore Mike McGuire called it a “difficult budget year” but said elected officials were able to “reduce the deficit, protect our progress and maintain responsible reserves.”

Democratic Assembly Speaker Robert Rivas said the Assembly “fought hard to protect the public services that matter most to Californians.”