Gov. Gavin Newsom signed SB 525 into law, increasing the minimum wage to $25 per hour for thousands of healthcare workers across the state over the next few years, Friday.
The signing closely followed a three-day strike by Kaiser Permanente healthcare workers earlier this month, which saw 75,000 employees across the country demand higher wages and action on understaffing, as reported by KQED. The strike also had its local roots, with nearly 800 healthcare workers and supporters of the strike forming a picket line in front of Kaiser Permanente Oakland Medical Center on Oct. 4.
The bill increases the wage floor for healthcare workers such as medical technicians, nursing assistants, custodians and other support staff. Increases will be incremental over several years and depend on factors such as the type of facility employees work in.
Before heading to the Governor’s desk, SB 525 was passed by the State Senate on Sept. 14 in a 31-9 vote.
“Today California is putting a stop to the hemorrhaging of our care workforce by ensuring healthcare workers can do the work they love and pay their bills — a huge win for workers and patients seeking care,” said Tia Orr, executive director of Service Employees International Union California, in a press release Friday.
The bill will benefit not only healthcare workers, but also the industry across the board since employers will see lower turnover rates which can be costly, said Enrique Lopezlira, director of the Low-Wage Work program at the UC Berkeley Labor Center.
Lopezlira co-authored a study for the Labor Center cited by proponents of the bill, including Sen. María Elena Durazo. The study touched on the fiscal impacts of the bill for both employees and employers.
“There’s well-established literature showing that higher wages reduce hospital turnover and you end up having better outcomes for patients: less wait times, lower hospital bed stays and so forth and ultimately better health outcomes,” Lopezlira said. “So from that perspective it’s not subjective.”
Additional studies from the Low-Wage Work program also pointed to possible savings for the state since nearly half of the workers who will see wage increases rely on social programs such as Medi-Cal, CalFresh, CalWORKS and the Federal Earned Income Tax Credit.
The law is expected to affect about 450,000 of the state’s health care workers, according to a Labor Center press release.
The minimum wage in Berkeley for all workers is currently $18.07. Healthcare workers whose wages were already higher than the floor will also receive wage increases in order to maintain their pay premium, according to the Labor Center study.
“By raising the minimum wage, we expect the share of workers who have to rely on the programs to go down and that would be a cost saving to the state,” Lopezlira said.