Proposed health care minimum wage increase: What it would mean for workers, patients, and industry

Together they represent 41% of all health care employees in the state, and almost 3% of California’s total workforce.25 This estimate includes 413,000 health care workers (88% of the total) directly affected by the higher minimum wage, and over 56,100 health care workers (12%) who will receive indirect wage increases due to the ripple effect from the new health care minimum wage (spillover effects. [...] One out of four affected workers have family incomes lower than 200% of the FPL, and two thirds of affected workers are under 400% of the FPL.28 Family income as a share of poverty level for health care workers Exhibit 9. [...] Payroll increases by type of health care facility Exhibit 14 shows the percentage change in payroll costs for each type of the covered health care facilities resulting from the health care minimum wage rising to $25 per hour.29 On average, health care facilities’ payroll costs are projected to increase by 8% under the higher wage standard. [...] Census Bureau’s 2020 5-year American Community Survey Changes in operating costs The ways in which an increase in the health care minimum wage impacts a facility’s operating costs is influenced by several factors, including the proportion of workers who receive a pay raise, the average magnitude of the raise, and the portion of labor costs relative to overall operating expenses. [...] Proposed health care minimum wage increase: What it would mean for workers, patients, and industry 16 Appendix: Methodology Affected Workers We used data from the American Community Survey (ACS) 2016-2020 5-year sample to estimate the proportion of health care workers who would be earning less than $25 an hour in 2024 in each of the health care facilities covered by SB 525, and to estimate the dem.