New health care minimum wage hike to cost CA billions


In abstract

Greater than half one million California well being care employees are anticipated to see a pay improve in January due to a regulation elevating the minimal wage for his or her trade. Gov. Gavin Newsom signed the regulation with no clear estimate about how a lot it will price the state.

Alvin Mauricio Medina works three jobs six days every week to help his household as the only real supplier for his or her Los Angeles family. He’s a licensed nursing assistant with a dream to maneuver as much as a higher-paying place in well being care.

“I’m attempting to raised myself, I’m attempting to maneuver on to being a registered nurse. However right here in California, with the low wages that we have now, both you’re employed otherwise you’re going to highschool,” he mentioned.

Now 45, he has been working in well being look after greater than 20 years and makes lower than $22 an hour. Whereas his foremost job is at a hospital in Hollywood, he picks up shifts as a nurse assistant at different hospitals to offer for his husband, who’s unable to work, and two children.

He’s anticipating to get a break come January, due to a regulation Gov. Gavin Newsom signed final month that creates the next minimal wage for well being care employees. The measure, which regularly raises the trade minimal wage to $25 an hour,  had help from each unions and the lobbying group that represents California hospitals. However lawmakers handed the invoice — and Newsom signed it — with no price estimate.

The prices are starting to come back into focus now that the Newsom administration is releasing projections for a way the wage hike may drive up the value of offering well being care to Californians for presidency companies. That determine, no less than $4 billion with about $2 billion from the state’s basic fund and one other $2 billion from the federal authorities, doesn’t embody anticipated pay will increase for public workers. 

The unions and lawmakers who advocated for the wage improve say it’s crucial to enhance the lives of overworked well being care employees. Union representatives say many employees have stop their jobs, leaving well being care methods understaffed and exacerbating situations for different workers.

“These are on a regular basis folks doing their jobs, struggling to make ends meet, struggling to pay lease,” mentioned Todd Stenhouse, spokesperson for AFSCME 3299, the union that represents blue-collar employees within the College of California well being system. “They deserve stability, safety. Their work deserves worth.”

College students and employees with AFSCME 3299 take part in a rally at UC Riverside in Riverside on Nov. 13, 2019. Picture by Watchara Phomicinda, The Press-Enterprise/SCNG

The brand new price estimates are unsurprising to Republican lawmakers who opposed the wage improve. Democratic lawmakers handed the measure regardless of the state’s projected $31 billion price range deficit.

“This invoice locations astronomical labor prices on well being care suppliers when hospitals throughout the state cope with monetary losses,” mentioned Republican Assemblymember Vince Fong of Bakersfield. “We had been involved that this invoice will result in decreased providers, elevated premiums, extra hospital closures, decreased job alternatives.”

What minimal wage hike means for payroll

Lawmakers didn’t have price estimates after they voted on the wage improve partially as a result of the ultimate invoice mirrored a last-minute deal between main well being care employers represented by the California Hospital Affiliation and the labor group Service Workers Worldwide Union. Their pact changed an earlier model that might have raised pay sooner for employees. 

Whereas the unique invoice would have elevated wages instantly to $25, the signed model would result in a gradual improve in wages. Most employees will begin making $25 an hour round 2027 or 2028.

About 500,000 well being care employees are anticipated to see their pay ultimately go up due to the brand new regulation. A few of them already earn $25 an hour or extra, however wages may improve due to wage competitors. 

A number of the employees are employed by the state, both on the UC well being system or in companies such because the Division of State Hospitals.

Be taught extra about legislators talked about on this story

María Elena Durazo

State Senate, District 26 (Los Angeles)

María Elena Durazo

State Senate, District 26 (Los Angeles)

How she voted 2021-2022

Liberal Conservative

District 26 Demographics

Voter Registration

Dem 62%

GOP 9%

No get together 23%

Marketing campaign Contributions

Sen. María Elena Durazo has taken no less than $1.4 million from the Labor sector since she was elected to the legislature. That represents 54% of her complete marketing campaign contributions.

Vince Fong

State Meeting, District 32 (Bakersfield)

Vince Fong

State Meeting, District 32 (Bakersfield)

How he voted 2021-2022

Liberal Conservative

District 32 Demographics

Voter Registration

Dem 26%

GOP 47%

No get together 18%

Marketing campaign Contributions

Asm. Vince Fong has taken no less than $608,000 from the Finance, Insurance coverage & Actual Property sector since he was elected to the legislature. That represents 13% of his complete marketing campaign contributions.

An early fiscal evaluation of the invoice additionally estimated a $25 minimal wage for College of California well being care employees would price the state as a lot as $180 million. The UC doesn’t have a brand new estimate for what the regulation will price its hospitals and well being facilities.

The Newsom administration and the Legislative Analyst’s Workplace are also tallying up the payroll prices for different state places of work. Finance Division spokesman H.D. Palmer mentioned 26,000 state workers throughout 12 bargaining models may even see a rise in wages.

Within the non-public sector, a advisor working for a coalition of well being care suppliers estimated the unique invoice with the speedy wage improve to $25 an hour would have price the trade $8 billion. The California Hospital Affiliation didn’t have a brand new estimate of projected prices when CalMatters requested one. 

SEIU California Government Director Tia Orr in a written assertion mentioned that almost all well being care employers supported the wage improve. She mentioned the union “has dedicated to working with the administration and the legislature to make sure safeguards are in place to ensure that this crucial measure is taken in a approach that preserves California’s fiscal well being, simply as we did when negotiating the final statewide minimal wage improve. That is the way you make progress –– by way of flexibility and compromise in attaining shared objectives.”

Well being care employees on public help

Newsom didn’t touch upon the regulation when he signed it. In distinction, he attended an occasion hosted by SEIU when he signed the same regulation that creates a $20 minimal wage within the fast-food trade.

Sen. María Elena Durazo, the Los Angeles Democrat who wrote the unique well being care wage improve, pointed to a special price estimate for the regulation created by the UC Berkeley Labor Heart. It projected the brand new regulation may lower your expenses by making certain employees earn sufficient cash to keep away from utilizing public help. 

“This historic funding within the employees who maintain us and make our well being care system perform and accessible reminds us the true low-wage nature of most of those jobs. Lots of of hundreds of Californians will see their wages improve, and this implies cash within the pockets of healthcare employees to assist help their households,” she mentioned in a press release.

Gabriela Guevara, a medical receptionist at Clinica Sierra Vista in Fresno, believes the regulation will ease staffing challenges in her trade.

“It’s going to higher serve all of the sufferers. The extra employees we have now, we’re going to have the ability to give that high quality of look after all of the sufferers which might be coming in,” she mentioned.

Medina, the licensed nursing assistant in Los Angeles, is hoping he’ll be capable of stop certainly one of his jobs when the brand new wage regulation takes impact. However he mentioned he’ll have extra free time. 

“It’s undoubtedly going to let me spend extra time with my children,” Medina mentioned. “It’s going to let me go to highschool. And I don’t have to fret about being late to my third job or my second job, I can simply deal with one.”

An earlier model of this story mentioned California hospitals estimated an instantaneous minimal wage improve to $25 would have price them $8 billion. The story was up to date at 10:10 a.m. on Nov. 13 to replicate {that a} broader coalition of well being care suppliers created that projection for industrywide prices.

Supported by the California Well being Care Basis (CHCF), which works to make sure thatpeople have entry to the care they want, after they want it, at a worth they will afford. Go to to study extra.


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