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$25 Minimum Wage Increase for California Healthcare Workers Might Face Delay Amidst State Budget Crisis

$25 Minimum Wage Increase for California Healthcare Workers Might Face Delay Amidst State Budget Crisis
Source: Pinterest

$25 Minimum Wage Increase for California Healthcare Workers Might Face Delay Amidst State Budget Crisis

Source: Pinterest

California healthcare workers have been informed about a possible increase in their minimum wages to at least $25 per hour, which Governor Gavin Newsom signed into law last year. 

Recently, it seems there has been a new development: the state government is negotiating a possible delay in implementing the wage increment, which is expected to initially go into effect by June 1, 2024.

California Government Increased Wages for Healthcare Workers

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Following the high cost of living in California, the governor and legislators have signed into law a possible increase in wages for healthcare workers across the state. 

According to Senate Bill 525, state healthcare workers are to realize increased wages in most healthcare sectors by 2028. This is supposed to start taking effect by June 1, 2024. 

Healthcare Workers To Realize a 19% Increase in the First Year of Its Implementation

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UC Berkeley is analyzing the new proposed increase in wages for healthcare workers in February 2024. Berkeley revealed that about 426,000 health workers would likely benefit from the wage increase in its first year of implementation. 

Berkeley said these healthcare workers would realize an increase of $6,400 in their wages by the end of the first year, which will account for a 19% increase in their yearly income. 


ALSO READ: Gig Workers Blast Corporate Greed as Seattle’s $20 Minimum Wage Boomerangs


Who Are the Beneficiaries of the Increased Wages in the Healthcare Sector?

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The law that seeks to increase wages for healthcare workers states that healthcare centers with over 10,000 full-time employees would ensure an increment of wages by $23 per hour, which will be put into effect by June 1, 2024. 

Nurses and other employees of a healthcare center must realize an increment of wages of $21 per hour, which should also start on June 1, 2024. 

State Budget To Increase if the Increase in Wages Is Not Delayed

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Reports have it that a bill will be signed by Governor Gavin Newsom by late June 2024, which means there is not much time to negotiate or fix the California budget. 

Hence, the UC Berkeley Labor Center mentioned that if the wage increase is not delayed, the state’s budget would increase by at least $2.7 billion. 

Increment of the Wages To Realize Some Cost-Offsetting for the State

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When the increase in wages for healthcare workers was announced last year, there was a brief that suggested the increment of the wages would realize some cost-offsetting for the state. 

The report states that nearly half of the families who rely on healthcare workers impacted by wage increments are enrolled in public safety net programs. This explains that the state could save money by reducing the need for these programs. 

Government Spending Deficit in December 2023

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Due to financial problems faced by the state, Governor Gavin Newsom mentioned in January 2024 that he intends to delay the scheduled wage increase by implementing a “trigger mechanism that will connect the increment to the state’s budget outlook. 

This is due to the government’s spending deficit realized by the state’s Legislative Analyst’s Office in December 2023. The deficit totaled to about $68 billion. This deficit wasn’t what was expected; hence the postponement of the increased wages was suggested. 


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Newsom Hints Potential Changes to Healthcare Worker’s Minimum Wage Law

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Recently, Newsom hinted about a slight change to the healthcare worker’s minimum wage law. However, he didn’t mention specifically what would happen but left it up to the legislature to handle. 

He mentioned that the budget will not be signed without the deal that the government is committed to being addressed. 

Uncertainty Causing Worrisome Among Health Workers

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Currently, there is uncertainty over the issue of increasing health workers’ wages. Workers are starting to wonder what exactly will play out, whether the government will eventually postpone or what is likely to culminate in a potential change to the wage increase law. 

According to the communications director for the Service Employees International Union-United Healthcare Workers West (SEIU-UHW), Nathan Selzer expressed concern for workers about the uncertainty of the situations surrounding the increment of wages.

No Specific Date for the Implementation of the Proposed Minimum Wage

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Nathan Selzer explained that the uncertainty of the increased minimum wage is confusing workers. Although he’s not directly involved in discussions with the governor and legislators, he can speak of what workers are going through regarding the minimum wage issue. 

He further speaks of how the government keeps confusing the whole situation by announcing two different dates for implementing the new minimum wages. 

Advocacy for $25 per Hour

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The Union for Healthcare Workers is currently pushing for a $25 per hour minimum wage and holding the governor accountable for what he signed himself last year. 

According to a dialysis worker named Alice on X, Alice is advocating for a $25 per hour minimum wage. She posted that it was no wonder the clinic is understaffed, pointing to $18 per hour as the major reason. 


ALSO READ: King County Approves Minimum Wage Increase to Over $20 an Hour

The Cause of the Delay Is Unknown

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The given date for implementing the new minimum wage is fast approaching, and the cause of the delay in what is to be done remains uncertain. 

To give certainty about the proposed increase in minimum wage, the governor and legislator would need to come together for a new bill to be passed and signed within two weeks. 

The Potential Cost of the Increased Minimum Wage for Health Workers in a Year

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Reports indicate that the state has estimated the new minimum wage to be about $4 billion. This is because, to partially offset the pay increases, the state may be forced to increase the amount it reimburses facilities for services rendered to patients on Medi-Cal. 

The state would also cater to its insurance program for low-income individuals and may have to pay for the wage increases for its employees at state health facilities.


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