UC raising its minimum wage to $15 an hour

The movement to raise the minimum wage across the U.S. gained ground Wednesday with the huge University of California system announcing plans to increase base pay for its employees and contract workers to $15 an hour over the next two years.

The move follows similar steps by local governments to give employees what activists call a “living wage.”

UC President Janet Napolitano said that as California’s third-largest employer, the university should be taking the lead in ensuring its lowest-paid workers make decent wages. UC has 10 campuses, including Merced, with nearly 240,000 students and a staff of 195,000.

“Our community does not exist in a vacuum. How we support our workers and their families impacts Californians who might never set foot on one of our campuses,” she said. “It’s the right thing to do.”

However, the pockets of most minimum-wage earners working for UC Merced won’t get much deeper, university officials said.

UC Merced, which employs nearly 2,000 people, including students, has only about 65 people making minimum wage. The university is one of largest employers in Merced County.

The university’s hourly wage earners – a group that includes students and full-time employees working in dining halls, dorms and bookstores or as gardeners, housekeepers and custodians at campuses and hospitals – currently make the state minimum of $9 an hour.

Napolitano said she will boost that to $13 in October for employees who work at least 20 hours a week and by $1 an hour in each of the next two years.

That’s probably good news for students such as UC Merced’s Ebisindei Adegbe, a 20-year-old cognitive science student who works at the campus bookstore, mostly part time during the school year. She said she hopes to benefit from the wage hike, but said many student employees work about 18 hours a week, not enough to qualify for the raise.

“Maybe I’ll see it – it would really help, that’s for sure,” Adegbe said Wednesday.

However, Michael Reese, the school’s vice chancellor of business and administrative services, said the vast majority of the school’s employees already make $15 an hour or more. Reese said the total cost of the increased wages is only expected to raise the university’s overall payroll by about $75,000.

“We absolutely support the decision (for raise increases) and have, by design, been ahead of the curve,” Reese said. “But we won’t be hugely affected by it.”

About 3,200 UC employees and a much larger but undetermined number of workers hired by university contractors will receive the higher wage, UC spokeswoman Dianne Klein said.

The higher minimum-wage argument has gained traction amid concerns over the shrinking middle class and rising income inequality.

Supporters argue a higher wage floor will help lift the working poor into the middle class. Opponents warn businesses will have to raise prices, shed jobs or cut employees’ hours. Sixteen states have passed laws barring local governments from setting their own minimum wage.

Democrats, including presidential front-runner Hillary Rodham Clinton, have said they support a higher federal minimum wage, which is currently $7.25 per hour.

Vice President Joe Biden was scheduled to promote a higher minimum wage during a stop Wednesday at a washroom equipment manufacturer in Los Angeles.

On Tuesday, Los Angeles County, the nation’s most populous county, voted to craft a law to raise the minimum wage to $15 over the next five years.

On the other side of the country, the New York the state Wage Board on Wednesday endorsed a proposal to set a $15 minimum wage for workers at fast-food restaurants with 30 or more locations. The increase would be phased in over three years in New York City and over six years elsewhere. The state’s minimum wage is now $8.75 an hour. Many fast-food workers say their industry should pay a minimum of $15 so they can afford the high cost of living in New York City and elsewhere.

Wal-Mart, the nation’s largest private employer, announced early this year that it is raising wages for a half-million employees to at least $10 an hour by February.

The $15 minimum has become the rallying cry of labor groups nationwide who argue the base wage hasn’t kept up with inflation.

University of California officials estimated that the raises for workers directly employed by UC will cost $14 million a year, a fraction of the system’s $12.6 billion annual payroll. Klein said UC also predicts contractors will pass some of the cost of higher wages on to the university.

In recent months, workers and UC union leaders have complained about the university’s increased reliance on contractors, who they say treat employees unfairly.

Napolitano said she is setting up a hotline and online reporting system so complaints about contractors’ labor practices go directly to her office. The university also plans to audit its contractors to make sure they are paying their workers the higher base wage, she said.

Napolitano’s minimum-wage plan does not need approval from the governing Board of Regents, who on Wednesday were scheduled to consider a 3 percent cost-of-living increase for campus chancellors, medical center directors and other top executives.

This story was originally published July 23, 2015 at 12:53 PM with the headline "UC raising its minimum wage to $15 an hour."