Gov. proposes minimum wage hike

Under the plan, the hourly wage would rise from $6.75 to $7.25 in September and to $7.75 in July 2007.

Schwarzenegger vetoed a bill last September that would have provided the same wage increase but also mandated automatic hikes to keep pace with inflation. In his veto message, the governor said he believed it was time to raise the minimum wage but did not support the annual increase.

The new proposal does not include an automatic yearly increase.

California’s minimum wage was last increased in 2002, when it rose by 50 cents an hour. The state’s lowest-paid workers already get more than the federal minimum of $5.15 per hour, but are paid less than other West Coast states. Oregon’s minimum wage is $7.25 an hour, while Washington’s is $7.35.

Assembly Speaker Fabian Nunez, D-Los Angeles, said he supports the governor’s proposal but considers it open for negotiation.

"The cost of living has gone up exponentially, but wages have been frozen, creating an underclass of the working poor,” he said. "That the governor recognizes this as a reality is a step forward.”

Nunez said he still favors automatic increases but said he is willing to consider other options, including a higher increase. The governor’s press office declined to comment publicly about the proposal.

The minimum wage proposal is the latest significant action by Schwarzenegger after voters rejected all four of his initiatives in the Nov. 8 special election. He has seen his popularity plunge and faces re-election next year.

In another move this week favored by Democrats, he proposed a freeze on fee hikes at California universities, meaning costs would remain the same next year after a series of increases. He also has ended his legal challenge over hospital staffing ratios, a fight that turned the state’s nurses union into one of his most persistent critics earlier this year.

And in a move that angered some conservatives, he appointed a longtime Democratic activist as his chief of staff just weeks after the special election.

Business owners are likely to give Schwarzenegger’s idea mixed reviews, said Scott Hague, owner of an insurance firm and founder of Small Business California, an advocacy group.

He said a lot of small businesses already pay their employees wages that are higher than the minimum and would not be affected by the increase.

"(But) there’s a recognition that the cost of living has gone up,” he said.

Jean Ross, executive director of the California Budget Project, a left-leaning think tank, said Schwarzenegger’s proposal is a positive. But she said small but consistent increases in the minimum wage — rather than sudden jumps — are better for the economy.

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