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July 2006, Volume 12, Number 3

California: Minimum Wage, EEEC

The California Legislature in June 2006 approved a bill that would raise the state's minimum wage from the current $6.75 an hour to $7.25 an hour in July 2007 and $7.75 an hour in July 2005. After 2009, the minimum wage would rise with inflation. Gov. Arnold Schwarzenegger supports the $1 an hour increase, but opposes an indexed minimum wage.

An estimated 1.5 million California workers earn the minimum wage or slightly more. For a full time worker, a $1 an hour boost would increase annual earnings from about $14,000 to $16,000. The federal minimum wage is $5.15 an hour, but many states have higher minimum wages. California's $6.75 minimum wage is the eighth-highest among states.

EEEC. California's Economic and Employment Enforcement Coalition (EEEC) conducted 944 investigations of seven types of businesses, including restaurants, racetracks and carwashes, between July 2005 and April 2006. EEEC investigators issued $3 million in citations for failing to provide workers' compensation insurance, but only 17 notices of minimum-wage or overtime violations, none in agriculture.

The EEEC includes 55 inspectors from health, wage, tax and employment development agencies and the Contractors' State License Board, and has a $5.5 million annual budget. CRLA charges that the EEEC is not active enough in agriculture, where it asserts that underpayment of wages is common. A 2005 CRLA survey of 1,050 raisin harvesters found 70 percent who said their piece rate earnings were below the state's minimum wage. California had the same number of labor inspectors in 2005 that it had in 1980.

EDD. California's EDD is the second-largest US tax collection agency, after the federal IRS, collecting $38 billion in 2004 (two-thirds personal income tax payments deducted from wages) from 1.1 million employers and issuing almost $9 billion in benefits to 2.5 million workers seeking UI and DI benefits.

California has 27.2 million residents 16 and older, and 17.7 million were in the labor force in March 2006, including 850,000 who were unemployed, 4.8 percent. About two-thirds of California residents 16 and older are in the labor force. [The US had 228 million residents 16 and older, and 151 million were in the labor force in March 2006, including seven who were unemployed, 4.7 percent.]

California had almost 15 million nonfarm payroll jobs in March 2006, and the five counties with over a million jobs had 61 percent of the total: Los Angeles county (27 percent), Orange (10 percent), San Diego (8.7 percent), Riverside-San Bernadino (8.1 percent) and Alameda (7.1 percent).

There were 5.8 million jobs in services, including professional and business services, education and health services, leisure and hospitality services, and other services. Another 2.8 million jobs were in trade and transportation, followed by 2.4 million in government and 1.5 million were in manufacturing, where average hourly earnings were almost $16. There were about 925,000 jobs in construction.

In the San Joaquin Valley, the three major farm counties of Fresno, Tulare, and Kern had labor forces of 397,000, 182,000, and 316,000 respectively, and unemployment rates of 9.5, 10.1, and 9 percent in March 2006. The US Department of Labor designates areas that have unemployment rates of at least 1.2 times the US unemployment rate "labor surplus" areas Most San Joaquin cities are labor surplus areas.

In December 2005, the Los Angeles City Council approved an ordinance requiring supermarkets with 19,000 square feet or more taking over others to normally keep the old employees at least three months, a bid to protect jobs at 1,000 Albertsons stores bought by Supervalu. In May 2006, the California Grocers Association challenged the ordinance, saying it conflicted with federal labor law. San Francisco has a similar ordinance.

Back Injuries. Back injuries are the most common and costly work-related farm injury, costing $10,000 or more for a first-time injury. The estimated 3,400 back injuries a year in California agriculture cost $35 million or more.

Lifting and twisting are the major causes of back injuries, and there is a dispute as to whether worker training or interventions that, for instance, reduce loads are most effective at reducing injuries. Most California wine grapes are machine picked, but the most expensive grapes are hand picked by workers who cut 25 to 50 bunches of grapes a minute, drop them into 60- to 70-pound tubs, and dump the full tubs into a gondola. Harvesting crews generally share a piece rate wage, which can be $150 a ton, and many harvesters literally run between the rows and gondolas to harvest as much as possible.

Research suggests that back injuries increase when loads of 55 pounds (25kg) or more are lifted repeatedly. However, switching to smaller tubs can reduce earnings for piece rate workers, who must make more trips to the gondola. University of California, Davis researchers introduced 50-pound tubs, and found that workers filled them to an average 46 pounds, compared to 57 pounds for traditional tubs. Workers picked fewer grapes with the smaller tubs, about 6,830 pounds in eight hours compared to 7,000 pounds, but had fewer back injuries. The smaller tubs are deemed a success and spreading.

A study of farm workers in the Central Coast region found that 70 percent do not have health insurance, and a third of the immigrant men had never been to a doctor. Almost half of the children in the area have at least one immigrant parent, but half of them are not in good health.

The Western Growers Association, which says that its members grow 95 percent of the vegetables grown in California and Arizona, 85 percent of the fruit and 80 percent of the nuts, reported that six of its top 10 issues for 2006 were labor-related: immigration, wages and housing, workers compensation, labor law, health insurance and minimum wages. Other top 10 issues were water availability and quality, energy costs and food safety.

Meyers, James M. et al. 2006. Smaller loads reduce risk of back injuries during wine grape harvest. California Agriculture. Vol 60. No 1. Pp25-31.