Newsom signs $25 minimum wage law for all hospital workers, finds out afterward it will cost California $4 billion
Governor Hairspray doesn't pay attention much to California's budget numbers when he signs off on a bill. It's as if putting on a green visor would mess up his costly coif.
So, in no surprise to the rest of us, Gavin Newsom was in for a surprise.
According to the Los Angeles Times:
When Gov. Gavin Newsom signed a law that set a first-in-the-nation minimum wage for healthcare workers, three words in a bill analysis foretold potential concerns about its cost: “Fiscal impact unknown.”
Now, three weeks after Newsom signed SB 525 into law — giving medical employees at least $25 an hour, including support staff such as cleaners and security guards — his administration has an estimated price tag: $4 billion in the 2024-25 fiscal year alone.
Half of that will come directly from the state’s general fund, while the other half will be paid for by federal funds designated for providers of Medi-Cal, California’s Medicaid program, according to Newsom’s Department of Finance.
SB 525 is one of the most expensive laws California has seen in years and comes as the state faces a $14-billion budget deficit that could grow larger if revenue projections continue to fall short. It was one of several labor-backed measures the Democrat-controlled Legislature passed this year in what amounted to an unusually successful run for organized labor. What lawmakers didn’t fully account for, as they scrambled in the final days of the session to broker a deal between unions and hospitals to support the bill, was how much it would cost the state — or what might have to be cut to pay for it.
So now the state gets to pay the janitors, gardeners, Mexican cleaning ladies (yes, real ones, and they live in Mexico and commute), gift shop clerks, and anyone else in the employ of a hospital, $25 an hour, no exceptions, and no matter what the value of their jobs are in the free market.
What a great way to spend the state's revenue at a time of a $14 billion deficit. Now Newsom gets an $18 billion deficit, but when you have a billion here, a billion there, who's counting?
Except that the Times notes that services in other areas are going to have to be cut to "pay for" these inflated wages.
Meanwhile, as far as those $25 an hour hospital cleaning jobs go, get ready for it -- those menial jobs will suddenly become very politicized as to who gets one. You can bet that anyone who has such a job will be or become a very dedicated Democrat union operative and willing to do anything for them. Get ready for the beefed-up ballot-harvesting brigades, muscling unwilling voters in their homes to play ball for the Democrats.
It's simply outrageous, and it was a completely preventable problem.
Had Newsom examined the cost and benefit of raising gardeners' wages to $25 an hour, like any normal governor would do, he would have probably modified the bill to reasonable standards, or better still, just said 'no.'
But this was unions we are talking about, and this one the same SEIU union Newsom succored a few weeks ago when he appointed Laphonza Butler to the Senate seat vacated by the death of Dianne Feinstein, even though she was a resident of Maryland. Newsom couldn't find any black female Californians to take the job? Of course not.
Butler had spent most of her working career as an SEIU organizer and operative, so we can see the outlines of the pattern here, given that unions have tremendous power in the state of California.
Now they've left him with a $4 billion bill, which he will blithely sweep under the rug as he cuts vital services elsewhere in the state. CalFire, the mighty wildfire fighting state agency, get ready for your haircut. California Highway Patrol, get ready for budget cuts.
We all know who's going to get the short end of the stick in this one as gardeners now make white-collar salaries.
We can also look forward to higher health insurance bills as those higher costs make their way down to the insurance agencies. Somebody's going to be paying for it.
No wonder Californians are bailing out. California has lost 800,000 residents during these Newsom years from 2020-2023, according to CapRadio. Another chart, from the Public Policy Institute of California shows tremendous losses -- noting at the end that there's no end in sight.
Don't we pay these politicians to consider costs and benefits of various spending measures before signing on? Normal governors look at costs before they sign the bills, not the other way? Not to Newsom. He just goes along with what unions want ... and now expects that his next stop is the seat behind the desk in the Oval Office.