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California considers delaying health care workers’ pay raise due to budget deficit

May 28

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A law signed in 2023 by California Gov. Gavin Newsom aimed to boost the minimum wage for health care workers but it now faces potential postponement. The legislation, which was supposed to take effect on June 1, seeks to raise the minimum wage to $25 per hour for nearly all workers in health care facilities, including janitors.

Costly measures and budget constraints

The law, one of the most expensive the state has seen in years, is estimated to cost $4 billion in its first year alone, according to Newsom’s administration. However, this price tag comes at a time when California is already grappling with a significant budget deficit of approximately $45 billion.

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The deficit is projected to grow to $56 billion over the next two fiscal years. State lawmakers are now reconsidering the implementation timeline due to these financial challenges.

Unions rally for fair pay

Unions have championed the legislation as a critical fix for a health care system that is hemorrhaging critical staff due to low pay.

News of the potential delay prompted a swift response from the Service Employees International Union-United Healthcare Workers West, which launched a campaign to hold Newsom accountable to the law he signed last October.

Health care workers have voiced their concerns, emphasizing that low pay contributes to staff shortages and compromises patient care.

Phased implementation and legislative hesitation

Right now, the minimum wage is $16 per hour in California. As it stands, the minimum wage for this sector would increase next month to $18-$23 per hour, depending on job title and location.

However, by 2028, nearly all workers in health care facilities would be required to be paid at least $25 per hour. The tentative plan faces scrutiny from the California Legislature, which is now considering pushing back the pay boost until at least July 1, the start of the new fiscal year.

Newsom announced this hesitation in January while reviewing the next fiscal year’s budget.

The Department of Finance estimates that half of the cost burden of this wage increase would fall on the state’s general fund, with the other half covered by federal funds. The department opposes the bill.

“Finance is opposed to this bill because it creates significant General Fund impacts and cost pressures,” a bill analysis report said. This bill will also create significant economic impacts in the healthcare industry, which may increase costs for consumers and the state.”

Despite the financial challenges, the bill’s author submitted paperwork to delay implementation by one month, and the state Legislature is expected to vote on the amendment during the week of May 26.

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A LAW IN CALIFORNIA THAT WILL BOOST THE MINIMUM WAGE FOR HEALTHCARE WORKERS WAS SIGNED BY GOVERNOR GAVIN NEWSOM LAST YEAR – 

AND WAS **SUPPOSED TO GO INTO EFFECT ON JUNE FIRST.

BUT LESS THAN A WEEK BEFORE THAT HAPPENS –

NEWSOM AND STATE LAWMAKERS ARE LOOKING TO POSTPONE THE IMPLEMENTATION OF A 25-DOLLAR MINIMUM WAGE FOR NEARLY ALL WORKERS – INCLUDING JANITORS – AT HEALTHCARE FACILITIES.

THE LAW IS ONE OF THE MOST EXPENSIVE THE STATE HAS SEEN IN YEARS –

EXPECTED TO COST 4 BILLION DOLLARS IN JUST ITS FIRST YEAR –

ACCORDING TO NEWSOM’S ADMINISTRATION.

BUT THE COSTLY TAB COMES AS THE STATE IS ALREADY SPENDING TENS OF BILLIONS OF DOLLARS MORE THAN WHAT THE ANNUAL BUDGET ALLOWS.

THE STATE’S BUDGET **DEFICIT – IS ROUGHLY 45 BILLION DOLLARS.

UNIONS HAVE PROMOTED THE LEGISLATION AS A FIX TO A HEALTHCARE SYSTEM THAT IS LOSING CRITICAL STAFF DUE TO ITS LOW PAY.

AFTER NEWS OF NEWSOM LOOKING TO WALKBACK THE MINIMUM WAGE LEGISLATION UNTIL A FISCAL SOLUTION IS IN PLACE FOR IT –

A UNION REPRESENTING UNITED HEALTHCARE WORKERS LAUNCHED A CAMPAIGN AIMING TO HOLD THE GOVERNOR TO THE LAW HE SIGNED IN OCTOBER.

HEALTHCARE WORKERS SHARED WHY THEY DON’T WANT THE LEGISLATION TO BE PUSHED BACK.

A TECHNICIAN SAYS “ITS NO SECRET WHY WE ARE SHORT STAFFED. ITS THE LOW PAY.”

A NURSING ASSISTANT SAYS “ON ONE OF THE WORST DAYS THERE WERE ONLY TWO OF US certified nursing assistants (CNAS) TO CARE FOR 38 PATIENTS.

A DIALYSIS PATIENT-CARE TECH SAYS “A LOT OF GOOD PEOPLE HAVE LEFT BECAUSE OF THE LOW PAY.”

THE CURRENT MINIMUM WAGE IN CALIFORNIA IS 16 DOLLARS AN HOUR.

THE WAGE INCREASE ASSOCIATED WITH THIS LEGISLATION – WOULD PHASE IN OVER THE NEXT FEW YEARS.

AS THINGS STAND – THAT MINIMUM WAGE FOR THIS SECTOR WOULD INCREASE NEXT MONTH TO 18 TO 23 DOLLARS – DEPENDING ON THE JOB TITLE AND PLACE.

BUT BY 2028 – NEARLY ALL WORKERS IN HEALTHCARE FACILITIES – WOULD HAVE TO BE PAID AT LEAST 25 DOLLARS AN HOUR.

WHILE THAT’S THE TENTATIVE PLAN –

THE STATE LEGISLATURE IS LOOKING TO BUMP THAT PAY BOOST BACK –

AT LEAST UNTIL JULY FIRST –

WHICH IS WHEN THE NEW FISCAL YEAR BEGINS. 

NEWSOM ANNOUNCED THE HESITATION IN JANUARY WHEN GOING OVER THE NEXT FISCAL YEAR’S BUDGET AND ESTIMATING THE ALREADY 45 BILLION DOLLAR DEFICIT WOULD GROW TO 56 BILLION OVER THE NEXT TWO FISCAL YEARS.

ACCORDING TO NEWSOM’S DEPARTMENT OF FINANCE – 

HALF OF THE COST BURDEN OF THIS WAGE INCREASE – WOULD BE ON THE STATE’S GENERAL FUND.

THE OTHER HALF would BE PAID FOR BY FEDERAL FUNDS.

CALIFORNIA’S DEPARTMENT OF FINANCE – IS AGAINST THE LEGISLATION.

SAYING IN A “BILL ANALYSIS” REPORT –

“Finance is opposed to this bill because it creates significant General Fund impacts and cost pressures. This bill will also create significant economic impacts in the healthcare industry, which may increase costs for consumers and the state.”

THE AUTHOR OF THE BILL SUBMITTED PAPERWORK TO DELAY ITS IMPLEMENTATION BY ONE MONTH.  

CALIFORNIA’S STATE LEGISLATURE IS EXPECTED TO VOTE ON THE AMENDMENT THIS WEEK.

I’M KARAH RUCKER –

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