California’s Democratic Party is scrambling to pull back a new law that would significantly increase wages for healthcare workers, estimated to cost the state an additional $4 billion per year. Currently, the minimum wage for all workers in California is $16 per hour, but starting this Saturday (June 1st), healthcare workers will see their wages bumped up to $18, $21, or $23 per hour, depending on the nature of their healthcare provider and job type. According to the SB525 bill, by no later than June 1, 2028, nearly all healthcare facility employees in California, including janitors and administrative staff, will receive a minimum hourly wage of $25.
Reports from the Washington Examiner reveal that the government cost implications are not new information, as previous legislative analyses had predicted, but were overlooked by Governor Gavin Newsom, who signed the bill last October. Now, with the law about to take effect, lawmakers are scrambling to delay it.
California’s budget deficit has been increasing steadily over the years, currently standing at $45 billion. The Governor’s office projects that the new healthcare minimum wage standards will cost the state an additional $4 billion annually, primarily due to increased Medicaid healthcare costs and subsidies for state-operated healthcare facility staff.
Maria Elena Durazo, the Democratic state senator and author of the bill SB525, has filed an “emergency” measure seeking to delay the wage increases until July 1st, 2024. Durazo stated that SB525 provides unprecedented pay raises for over 450,000 healthcare workers, predominantly women and people of color, who are essential caregivers crucial to the functioning of the healthcare system.
She further explained, “SB828 delays the effective date of the healthcare minimum wage increase to July 1, 2024, aligning it with the budget year and allowing the legislature the opportunity to continue discussions with the executive branch and make necessary technical adjustments to ensure healthcare workers receive the deserved raises.”
Earlier this year, Governor Newsom also signed a bill increasing the minimum wage for fast-food workers in government-operated properties to $20 per hour.
Critics argue that California’s rush to raise wages is financially irresponsible, showing the pitfalls of progressivism eating its own. The Wall Street Journal recently opined, “When healthcare providers warn that wage increases could lead to cuts in patient services, Democrats shrug. Who cares if Californians have to wait longer in emergency rooms? But now, Democrats are concerned that higher healthcare costs in the state may force larger scale spending cuts. Oh no. Californians may have to wait even longer for that train to nowhere.”
One organization not in favor of delaying the wage increase is the Service Employees International Union-United Healthcare Workers West (SEIU-UHW), which advocates for raising wages in the healthcare industry. Recently, SEIU-UHW launched an advertising campaign in an attempt to pressure Governor Newsom. An advertisement on X platform featured a dialysis clinic owner named Alice, with the union claiming she provides life-saving medical care.
“However, in the facilities she operates, nursing staff start at just $18 per hour, a low wage that understandably contributes to a shortage of personnel crisis,” the advertisement said, “Increasing the minimum wage for healthcare workers to $25 per hour will help ensure patients receive necessary care.”
Nathan Selzer, the communication director of SEIU-UHW, stated that union members have been, “concerned in the past and still are now.” Selzer told CalMatters, “Discussions earlier this year showed that people are too focused on the money itself, neglecting the purpose of this money… Therefore, we made a decision that we must remind everyone of the true purpose behind the initial drafting of this law.”