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California Lawmakers Reach Deal to Raise Minimum Wage to $15

California lawmakers have reached a tentative deal with labor groups to increase the state's minimum wage to $15 an hour over the next six years, a move that could head off a costly fight at the ballot box in November.

By Melody Gutierrez and John Wildermuth

California lawmakers have reached a tentative deal with labor groups to increase the state's minimum wage to $15 an hour over the next six years, a move that could head off a costly fight at the ballot box in November.

The Legislature is expected to roll out the deal this week, according to the Assembly speaker's office. In an email obtained by The Chronicle, Speaker Anthony Rendon told Assembly Democratic Caucus members that "there appears to be a minimum-wage deal," which will be discussed Monday during a caucus meeting. A vote on the plan could come as early as Thursday, sources said.

If a deal is reached, proponents of the minimum-wage initiative could pull the measure from the ballot, a move that would mark the first victory for a 2015 law that changed the way California deals with ballot initiatives. Previously, initiatives had to appear on the ballot once they were submitted with the necessary signatures to qualify, regardless of whether the measure's proponents still supported it.

Labor unions qualified the minimum-wage ballot initiative last week after gathering the needed 365,880 signatures. The initiative would boost California's minimum-wage from the current $10 an hour to $15 an hour by January 2021 by increasing about a dollar most years. Backers of another initiative are still collecting signatures for their alternative, which would push the hourly minimum to $15 on July 15, 2020.

The tentative agreement between Gov. Jerry Brown's office, labor and legislative leaders would raise the minimum to $15 an hour in 2022 and would give small businesses another year beyond that to reach the $15 level, according to Rendon's email to Assembly Democrats. The added time could be enough to persuade state business leaders to sign on, especially if the more aggressive minimum-wage increase looks like a winner in November.

Yearly increases proposed

Under the deal, the rate would increase by 50 cents the first two years, to $10.50 in 2017 and $11 in 2018, then by $1 per year until it reaches $15 in 2022, according to a source.

The tentative agreement also includes the caveat that the wage increases could be halted during economic downturns, according to the email.

Steve Trossman, a spokesman for Service Employees International Union-United Healthcare Workers West, which sponsored the minimum-wage ballot measure that qualified last week, declined to say whether his union has signed on to the tentative deal.

"If there is legislation, we want to see what's on it and we want to analyze it," he said. "If it's passed and it's signed, then we'll decide what we will do with our initiative."

With the initiative having already qualified for the November ballot, labor interests hold the upper hand in the negotiation. Although an agreement with Brown and the Legislature would save them from what would probably be a fierce -- and fiercely expensive -- fall campaign against California employers and business interests, that's a battle they believe they would win.

"We already have an initiative," Trossman said. "And it's very popular."

California has one of the highest minimum wages in the country at $10 an hour. Massachusetts' minimum wage is also $10 an hour, while Washington, D.C., has the highest at $10.50.

Several Bay Area cities have recently passed legislation ensuring that local workers will make at least $15 per hour well before 2022.

The minimum wage in Emeryville will hit $15 in 2017 or 2018 (depending on the size of the business), low-wage workers in San Francisco, Mountain View and Sunnyvale will receive at least $15 per hour by 2018, and employees in El Cerrito will hit the $15-per-hour threshold by 2019.

Berkeley, Oakland, Richmond, Palo Alto and Santa Clara have also boosted their minimum wages since 2014, according to data collected by the UC Berkeley Labor Center.

Nationwide, half of the 32 counties and cities that have passed local minimum-wage laws since 2012 were in California, the center found.

Resistance from employers

Business groups opposed to raising the minimum wage recently created the Consumers Against Higher Prices Committee to fight the ballot initiative. The group includes the California Restaurant Association, the California Retailers Association and the Los Angeles Area Chamber of Commerce.

"It is imperative that lawmakers listen to the voices of their constituents rather than bowing to the will of special interest groups," the group said Sunday. "If this overreaching deal is passed through the Legislature, it will not solve any of the fundamental problems it seeks to address, and will result in devastating impacts to family-run businesses, education, seniors, services for the disabled, working families and more."

Sen. Mark Leno, D-San Francisco, wrote a bill last year to raise the minimum wage to $13 by 2017 and add cost-of-living increases starting in 2019. That bill, SB3, stalled in the Assembly but is expected to be rewritten if a deal is reached so that Leno carries the legislation that would bring the minimum wage to $15 in 2022.

If that happens, it will be the first time lawmakers have taken advantage of the 2015 law designed to give proponents of initiatives that have qualified for the ballot an opportunity to work with lawmakers to craft deals. SB1253 requires the Legislature to hold a joint public hearing on a proposed initiative as soon as 25 percent of the required signatures are collected.

The bill also allows initiatives that have qualified to be pulled from the ballot by their backers. In the past, once an initiative was certified as having collected the signatures needed to make the ballot, only the courts could remove it. For example, in 2012, a proposition on Senate redistricting became irrelevant after a California Supreme Court decision on the matter. By the time the initiative appeared on the ballot, supporters had stopped campaigning for it and even wrote opposition arguments.

'How it's supposed to work'

Darrell Steinberg, the former Senate president pro tem who wrote SB1253, said Sunday that the tentative minimum-wage deal shows his ballot reform bill is working.

"This is an example of exactly how it's supposed to work," Steinberg said. "It shouldn't be such drama at the point where signatures are due. Then it's all or nothing. Now what happens is the initiative proponents have until the end of June to determine whether to go forward. That leaves more time for them, the governor and the Legislature to find common ground."

Chronicle staff writer Joaquin Palomino contributed to this report.

(c)2016 the San Francisco Chronicle

Caroline Cournoyer is GOVERNING's senior web editor.
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