California Governor Gavin Newsom has signed a new law that will raise the minimum wage for health care workers to $25 per hour over the next ten years. This follows a previous law signed by Newsom last month, which raised the minimum wage for fast food workers to $20 per hour. Both of these wage increases are the result of extensive lobbying by labor unions in the state.
The specific wage increase for health care workers was the product of a compromise between the health care industry and labor unions, as a way to avoid costly ballot initiative campaigns. The law will preempt local minimum wage increases that several city councils in California had already passed.
Despite concerns about the impact on the state’s budget, Newsom ultimately decided to sign the legislation. The wage increase would have put additional financial pressure on California’s Medicaid program, which is a major source of revenue for many hospitals. Labor unions argue that raising the wages of health care workers will help some individuals transition out of Medicaid and other government support programs.
A study by the University of California-Berkeley Labor Center found that nearly half of low-wage health care workers and their families rely on publicly funded programs. The researchers predict that the savings from individuals leaving these programs will offset the costs to the state.
The $25 minimum wage had been a point of negotiation between Kaiser Permanente and labor unions representing approximately 75,000 workers. Last week, these workers went on strike for three days, but a tentative deal was reached between both sides on Friday.
This strike comes in a year marked by work stoppages across various industries, including transportation, entertainment, and hospitality. The health care industry, in particular, has faced challenges due to burnout from heavy workloads, which have been further exacerbated by the COVID-19 pandemic.
