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Wage Hikes in CA, NY and UK Could Shake up the Sector

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Minimum wage workers are tired of under-earning and the world is starting to hear them.

Both New York and California moved forward on plans this week to implement a $15 minimum wage.

New York State governor Andrew Cuomo and state legislative leaders reached a deal Thursday to raise the minimum wage in New York City to $15 by the end of 2018, but did not agree on the same statewide rollout. The rest of the state will see a slower journey to $15. Westchester County, for example, might only reach $12.50 by 2021, up from the current $9 state minimum.

California also made progress Thursday when the Senate voted 26 to 12 to give the $15 hike final approval and send it to Governor Jerry Brown’s desk.He’s expected to sign the wage increase into law on Monday.

With the new law, California’s wage will go from the current $10 per hour to $10.50 next year, $11 the following year and then up $1 each year to $15 by 2022. Companies with fewer than 26 employees will have an additional year to comply.

Senate President Pro Tem Kevin de León (D-Los Angeles) said in advance of the vote, “At its core, this proposal is about fairness,” adding, “This is historic and today I am proud to be a Californian.”

Other senators were not so optimistic.

“Our job in this building is to help people climb the economic ladder, not cut off the bottom rungs,” Senator Ted Gaines (R-Rocklin) said, adding that the increase will be a “death sentence” for the businesses in his district. “That is exactly what will happen if we shove this unprecedented cost increase on businesses.”

Across the water in the U.K., the new national living wage took effect Friday. Now all employers have to pay staff age 25 or older a minimum of 7.20 pounds ($10.24) per hour, up from the previous 6.70 pounds ($9.53), which will still apply for workers age 21 to 25.

That minimum wage, however, still falls short of the country’s voluntary living wage of 8.25 pounds ($11.74) and 9.40 pounds ($13.38) for London, as calculated by the Living Wage Foundation to reflect the amount an employee actually needs to earn for a decent living.

In the U.K., as in California and New York, employers are struggling with how to afford the new pay rates.

“Some have said they will hike prices, some have said they will cut jobs and use machines where possible to replace workers,” the Guardian wrote. “So shoppers might expect even more automatic checkouts, for example.”

Productivity improvements along with increased automation are likely to follow in the industry as employers look to do more with less in order to manage.

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