SACRAMENTO & SISKIYOU COUNTY, Ore. — Another industry-specific minimum wage increase is coming to some California workers. It raises healthcare pay to $25 per hour across the next decade.
California will raise the minimum wage for health care workers to $25 per hour because of a new law Governor Gavin Newsom signed Friday. The new law is the second minimum wage increase Newsom has signed recently. Last month he signed a law raising the minimum wage for fast food workers to $20 per hour.
Both wage increases are the result of years of lobbying by labor unions, which worked to influence the state’s Democratic-dominated legislature. Newsom is a Democrat, too.
“Californians saw the courage and commitment of healthcare workers during the pandemic, and now that same fearlessness and commitment to patients is responsible for a historic investment in the workers who make our healthcare system strong and accessible to all,” said Tia Orr, executive director of the Service Employees International Union California.
healthcare worker holding mask, tired
The wage increase for health care workers reflects a compromise in the final days of the legislative session between the healthcare industry and labor unions to avoid ballot initiative campaigns.
Several city councils in California already passed local laws to raise the minimum wage for healthcare workers. The healthcare industry then supported referendums asking voters to block those increases. Labor unions responded by qualifying a ballot initiative in Los Angeles that would limit the maximum salaries for hospital executives.
The law Newsom signed Friday would preempt those local minimum wage increases. His administration had expressed concerns about the bill previously because of how it would affect the state’s budget.
California’s Medicaid program is a major source of revenue for many hospitals. The Newsom administration had warned the wage increase would have caused the state to increase its Medicaid payments to hospitals by billions of dollars.
Labor unions say raising the wages of healthcare workers will allow some to leave the state’s Medicaid program, plus other government support programs that pay for food and other expenses. A study by the University of California-Berkeley Labor Center found almost half of low-wage healthcare workers and their families use those publicly funded programs. Researchers predicted the savings would offset the costs to the state.
The $25 minimum wage had been a point of negotiations between Kaiser Permanente and labor unions representing about 75,000 workers. Those workers went on strike for three days last week. Both sides announced a tentative deal Friday.
The strike came in a year when there have been work stoppages in some industries, including transportation, entertainment and hospitality. The healthcare industry has been confronted with burnout from heavy workloads, a problem greatly exacerbated by the COVID-19 pandemic.
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