Increase in California minimum wage likely

SACRAMENTO, Calif. – California’s minimum wage would increase by $1.25 an hour over the next two years under a deal struck Monday between Gov. Arnold Schwarzenegger and legislative leaders.

The agreement ends, at least temporarily, a stalemate between the governor and Democratic lawmakers and clears a political hurdle for Schwarzenegger as he seeks re-election.

The governor agreed during negotiations to boost California’s minimum wage from $6.75 to $8 an hour after Democrats dropped their demand for annual increases to keep up with inflation.

Schwarzenegger has vetoed two attempts to raise the state’s minimum wage, which is far higher than the federal rate of $5.15 an hour but lags behind the rates in several other states.

If the agreement is approved by the Legislature and signed into law, the minimum wage would increase by 75 cents next January and by 50 cents in January 2008.

The state Senate is expected to begin considering the proposal Thursday.

Schwarzenegger issued a statement describing the compromise as a “common sense” solution that would lead to a higher wage for working Californians without hurting the state’s economy.