California Democrats Postpone Health Worker Minimum Wage Hike to Balance Budget

California Democrats Postpone Health Worker Minimum Wage Hike to Balance Budget

California Governor Gavin Newsom and legislative leaders have agreed to delay the implementation of a minimum wage increase for approximately 426,000 health care workers. The new $25 per hour wage, initially scheduled to be phased in over the next decade, will now take effect on October 15 if state revenue from July to September is at least 3% higher than current estimates. Should the increase be postponed until January, it is projected to cost the state's general fund about $600 million.

The agreement is part of a broader strategy to address a projected $46.8 billion budget deficit and includes $16 billion in budget cuts. These cuts encompass $110 million from scholarships for prospective college students from middle-income families and $1.1 billion from various affordable housing programs. The delay aims to balance the state's budget while accommodating the financial impact of the wage increase on California's health care sector, which is partially funded by the state's Medicaid program.

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