Olivia Allen-Price [00:00:17] You are not imagining it. Food prices, among other things, are getting more expensive.
Ericka Cruz Guevarra [00:00:22] And as you know, California is already an expensive state to live in. So when you add up rent, gas, and groceries, things get real, real fast.
Olivia Allen-Price [00:00:35] Prop 32 proposes one way to help Californians keep up with the rising cost of everyday life by raising the state’s minimum wage to $18 an hour.
Ericka Cruz Guevarra [00:00:47] But some worry doing this will only make things more expensive than they already are. And when it comes to fights about the minimum wage, we’ve heard that argument before. I’m Ericka Cruz Guevara.
Olivia Allen-Price [00:01:02] And I’m Olivia Allen-Price. Welcome to Prop Fest, a collaboration between the Bay and Bay Curious where we help you get smart on all the statewide propositions on your ballot this November.
Ericka Cruz Guevarra [00:01:13] The push for livable wages in California is not new, and it’s usually driven by workers and labor unions.
Olivia Allen-Price [00:01:22] But the effort to get prop 32 on the ballot has a much more unusual beginning. We’ll get into that and more on prop 32 right after this.
Ericka Cruz Guevarra [00:01:39] Today we’re diving deep into prop 32. The minimum wage increase. Here’s how it’ll look on your ballot.
Voiceover [00:01:48] Prop 32 raises minimum wage as follows. For employers with 26 or more employees to $17 immediately $18 on January 1st, 2025 for employers with 25 or fewer employees to $17 on January 1st, 2025. $18 on January 1st, 2026.
Ericka Cruz Guevarra [00:02:12] Today, we hit up KQED labor correspondent for Farida Jhabvala Romero to help us understand what prop 32 is all about.
Ericka Cruz Guevarra [00:02:22] Farida, California, I feel like, is no stranger to fights around raising the minimum wage. We’ve kind of seen these debates before, but remind us what exactly those debates have look like over the years and where we stand right now.
Farida Jhabvala Romero [00:02:38] Well, we know that over the last decade, the state’s minimum wage has doubled from $8 an hour to 16, which is what we have now. The last big jump came through a bill approved by the legislature and signed by then governor Jerry Brown in 2016. Another thing is that we’ve passed state laws that increase the minimum wage for some industries, like fast food. So now half a million fast food workers in the state are making at least $20 an hour since April. Dozens of local cities and counties have also passed their own higher minimum wage. In L.A., it’s $17.28. In San Francisco, it’s more than $18 an hour. And then in Emeryville, here in the Bay area, it has one of the highest wage floors in the country, actually, at $19.36 an hour.
Ericka Cruz Guevarra [00:03:41] So, I mean, Farida, we know that a lot of folks have pushed to raise the minimum wage in California. Like unions in particular, many Democratic lawmakers, the governor as well. But how did prop 32 get on the ballot? Did it come from the same groups who’ve been pushing for this in the past?
Farida Jhabvala Romero [00:04:03] Well, prop 32 has a sort of unusual story because the main financial backer for it is a guy called Joe Sanberg, who grew up in Orange County.
Joe Sanberg [00:04:15] When you raise wages for your workers, they do better for your company. They have more money to spend in their communities, which creates more economic prosperity for local communities.
Farida Jhabvala Romero [00:04:25] He’s an investor and also an anti-poverty advocate. He spent more than $10 million of his own money to help this measure qualify for the ballot. He says he’s not making any money out of this ad, that he wants to use his resources to help fellow Californians because of his own experience.
Joe Sanberg [00:04:44] I grew up in working class family. My mom raised me by herself. We lost our home to foreclosure when I was a teenager. I saw firsthand how hard it is for a single mom to raise kids in California.
Farida Jhabvala Romero [00:04:56] The main supporters intended to qualify for the ballot in 2022, but they missed a key deadline, and so it was basically delayed for voters to this election in November.
Ericka Cruz Guevarra [00:05:10] Can you break down just a little bit more exactly for you to what proposition 32 would do? Because as you said, the the statewide minimum wage is $16 an hour, but it’s also higher in some cities in certain industries. So what kind of change would prop 32 make exactly.
Farida Jhabvala Romero [00:05:29] Yeah. So prop 32 would not impact the higher minimum wages set by cities, counties or the industry specific, minimum wages that the state has approved for fast food or the health care industry. What it would do is it would raise the minimum wage to at least $18 an hour. By 2026, bigger businesses with more than 25 employees would have to do it faster by 2025, and that employers with 25 or fewer workers would start paying $17 an hour next year, and then 18 in 2026. And then from then on, the minimum wage would adjust annually tied to inflation. So those are smaller increases that are expected. And then it’s important to note that the minimum wage in the state is already set to keep going up. And without this proposition passing, it will likely be around $17 an hour in 2026, according to the Legislative Analyst’s Office. The backers of prop 32 estimate that around 2 million people would directly benefit from the race, especially outside big metro areas. You know, like outside the San Francisco Bay area around L.A., San Diego. And we’re talking about the lowest paid workers in the state. So those are often cashiers, retail salespeople, farm workers, home health and personal personal care aides and other workers. The workers that we’re talking about live mostly in the Central Valley and other rural areas of the state, in the northern part of the state. And that’s actually something that proponents point out is that these are workers that are also often not unionized. So they, you know, they really need this.
Ericka Cruz Guevarra [00:07:30] And Farida, who is lining up behind prop 32 and really coming out in support of it.
Farida Jhabvala Romero [00:07:37] So supporters include some some unions. One of them is Unite Here local 11. They represent thousands of workers in hotels, sports arenas, restaurants. Then there’s the Service Employees International Union, which has many large unions in California, and they’ve endorsed prop 32. You know, they represent people who would definitely benefit from this. And then the other big supporter is One Fair Wage, which is a group that advocates for employers to pay a living wage.
Saru Jayaraman [00:08:09] I know so many workers who work in restaurants in San Francisco and live in Tracy in Stockton, and they go home once a week. They live in their cars during the week.
Farida Jhabvala Romero [00:08:17] Saru Jayaraman directs One Fair Wage. I mean, they make the basic argument that this is a critical time, because we already know that $16 an hour is not enough to afford the basics in California.
Saru Jayaraman [00:08:36] I think the initiative Is critical because the legislature this time has not acted the way it should have. It should have passed a higher minimum wage already.
Farida Jhabvala Romero [00:08:45] And so they see this proposition as a critical first step. She feels like there hasn’t been more mobilization, you know, and noise from unions, on this in part because many of the workers who directly benefit are not unionized.
Saru Jayaraman [00:09:03] The overwhelming majority of minimum wage workers rely on the legislature to give them a raise. And when they don’t get it to the legislature, the only mechanism they then have is at the ballot.
Farida Jhabvala Romero [00:09:15] But, you know, other proponents like Joe Sanberg, the main financial backer for prop 32, also told me that it would have been impossible to qualify the measure for the ballot without union volunteers and without union support. Now that we just have weeks before the election, the coalition of proponents will be more active.
Ericka Cruz Guevarra [00:09:42] And who’s coming out on the no side on this, Frida. And what’s the argument there?
Farida Jhabvala Romero [00:09:48] Opponents are mostly business groups. We’re talking about the California Restaurant Association, the California Chamber of Commerce. Some of the arguments against prop 32 are very similar to those against the fast food minimum wage I was telling you about when that was being considered. And it’s basically that, you know, employers will need to cut work hours and jobs or raise prices to be able to afford the higher payroll costs. And they say it’s bad timing also because Californians are already, reeling from a super high cost of living.
Ron Fong [00:10:32] $2 doesn’t sound like a lot, but when you factor that over thousands of employees, it gets to be a big amount.
Farida Jhabvala Romero [00:10:39] I spoke with Ron Fong, who’s president and CEO of the California Grocers Association. They represent large chains like Whole Foods and Costco and then a lot smaller, you know, grocery retailers.
Ron Fong [00:10:52] Especially for grocery stores. Grocery stores operate on a very low, net margin.
Farida Jhabvala Romero [00:10:58] And he says this proposition will likely make these businesses increase prices because it would affect their bottom line.
Ron Fong [00:11:06] The only way we can recapture that is by raising prices. And, you know, that’s been proven time and time again is the number one concern amongst, you know, U.S. citizens.
Ericka Cruz Guevarra [00:11:18] And, I mean, we’ve heard that argument before, right, Farida? I mean, it’s a it’s a pretty common one when it comes to debates around, raising wages for workers. But what do we actually know about. that and whether or not it’s it’s true — and that actually does happen when wages for workers are increased.
Farida Jhabvala Romero [00:11:41] So I spoke with a couple of economists who do research on minimum wage and follow these debates. They told me that minimum wage increases to the levels that we’ve had so far, you know, which are gradual, relatively small increases. They don’t really have a big impact on jobs. So they’re not the big job killers that, business groups, sometimes, you know, fear. Also, they have a very small impact on prices. You know, one of the impacts might be that the prices end up going, higher, but it’s a relatively small increase as well. California, you know, is the first state to implement a minimum wage for fast food workers of $20 an hour. And so that’s been in effect since April. So we’ve had a couple of months of some data on jobs. You know, a lot of people have a lot of complaints, you know, a lot of business owners saying that they’ve had to work, cut work hours, or cut jobs in and raise some prices. But if you look at the overall data and talk to economists, they’ll tell you, that they haven’t seen a huge impact yet.
Ericka Cruz Guevarra [00:12:55] Let’s talk about the money being spent on the yes and no sides here. Frida. Has there been much campaign spending on either side of this proposition?
Farida Jhabvala Romero [00:13:06] So most of the campaign spending was done to qualify the measure for the ballot. And so that was, you know, before because like I was telling you, there were aiming to put that in the 2022 election ballot. There’s the Working Hero Action for the Living Wage Act, which has reported contributions of almost $11 million, and that’s, backed mostly by Joe Sanberg. Then there’s the Kevin De Leon believing in a better California ballot measure committee, and they’ve, reported contributions of almost $600,000. And then in the opposition side, there’s Californians Against Job Losses and Higher Prices. No, on prop 32. They, have reported contributions of $65,000. I spoke with Joe Sanberg recently and he said there’s going to be a lot more movement now, especially to try to convince younger voters who are more likely to support this proposition. There was a recent Public Policy Institute of California survey that showed likely voters were really divided on prop 32, with just 50% saying they would support it. But their biggest levels of support came among renters and then people making less than $40,000 a year, and also younger voters. Joe Sandberg believes that, you know, with Vice President Kamala Harris entering the race for the white House, that that will attract a lot more voters to the ballot box. And, they will support this proposition. But we’ll we’ll see.
Ericka Cruz Guevarra [00:14:59] Well, for you to thank you so much for breaking this down for us. I really appreciate it.
Farida Jhabvala Romero [00:15:02] Thank you. Ericka.
Ericka Cruz Guevarra [00:15:08] In summary, a vote yes on prop 32 would raise the state minimum wage floor to $18 an hour in 2026. After that, it would go up each year based on how fast prices are rising. A vote no means the state minimum wage would likely be at $17 an hour in 2026, and would go up based on prices after that. And that’s it for proposition 32. If this episode helped you out, do me a favor and tell just one friend about Prop Fest because good friends help their friends vote smart. Just send them to kqed.org/prop fest.
Olivia Allen-Price [00:15:59] Prop Fest is a collaboration between the Bay and Bay Curious Podcasts. It’s produced by Alan Montecillo, Jessica Kariisa, Ericka Cruz Guevara, Amanda Font, Christopher Beale, Ana de Almeida Amaral and me, Olivia Ellen Price.
Ericka Cruz Guevarra [00:16:14] We get extra support from Jen Chien, Katie Sprenger, Maha Sanad, Holly Kernan.
Olivia Allen-Price [00:16:20] Our show is made in San Francisco at member supported KQED. If you value podcasts like this one, please consider becoming a sustaining member of KQED. Learn more at KQED.org/Donate. I’m Olivia Allen-Price.
Ericka Cruz Guevarra [00:16:34] I’m Ericka Cruz Guevara. We’ll be back tomorrow with an explainer on proposition 33, which asks, Should California remove statewide rent control limits?
