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

UC Berkeley Labor Center


FOR IMMEDIATE RELEASE | April 11, 2023
Contact: Julie Light, julie.light@berkeley.edu, 415-215-5737

New report outlines impacts for workers, patients, and health care industry of proposed increase to minimum wage for California health workers

California Senate Labor Committee to hold hearing on April 12 on SB 525, which would raise health care minimum wage to $25 an hour

Berkeley, CA – A new report, Proposed health care minimum wage increase: What it would mean for workers, patients, and industry, by the UC Berkeley Labor Center looks at the impacts of a proposal to raise the health care minimum wage in California to $25 an hour. The report finds that Senate Bill 525 (Durazo), which would raise the health care minimum wage from $15.50 to $25, would not only make a significant difference to health care workers and their families, but it would also improve patient care and help reduce staffing shortages that plague the industry. While there is a large variation across types of facilities, the wage increases would raise operating costs by about 3%, which represents 1.3% of personal health spending in the state.

Tomorrow, the Senate Labor, Public Employment and Retirement Committee is set to vote on SB 525; should it pass it would move next to the Appropriations Committee. The Labor Center estimates that almost half a million workers would be affected by the proposed wage increase, including more than 50,000 workers who currently earn just over $25 an hour and would get a pay bump to maintain their premium. The lowest-paid workers would receive an average wage increase of over $5.74 per hour, or about a 30% increase in pay. The vast majority of those who would benefit are workers of color, who represent 70% of affected workers, and women, who make up three out of four affected workers. The majority of affected workers are the primary income providers in their households. Close to half have children.

“Our research shows that the proposed minimum wage has the potential to substantially improve conditions for low-wage health care workers who provide essential services to the state, to ameliorate staffing shortages in the industry, and to improve quality of care,” said report author Enrique Lopezlira, director of the Labor Center’s low-wage work program.

“A $25 an hour minimum wage would improve the health care setting for me and my colleagues and our loved ones. We’d be less stressed and feel more hope and more valued,” said Eneryck Santana, a medical assistant at the San Ysidro Medical Center in Chula Vista. Santana and his partner, who is also a medical assistant, recently moved to Tijuana, about 10 miles from the clinic where he works, because of the high cost of living in Southern California.

The majority of the lowest-paid workers–including orderlies, pharmacy aides, personal care aides, nursing assistants, janitors, and food preparation workers–struggle to make ends meet. Even those earning above the minimum wage are not self-sufficient and struggle to pay rent, childcare, and groceries.

The report finds that these low wages also significantly contribute to the difficulty in maintaining adequate health care staffing across the state. Staffing shortages impact patient care, leading to increased wait times, longer hospital stays, and inadequate treatment of chronic illnesses.

“Turnover has been a real issue at my facility. At present, we have only two regular and three reliever CNAs, because it’s so hard to hire and keep new people. Most of us have 19 to 24 patients” said Ethel Naldoza, a certified nursing assistant at the San Pablo Healthcare and Wellness Center.

Well-established research also finds a strong relationship between pay, turnover, and quality of care. High turnover rates are associated with increased costs for employers and poor outcomes, and even death, for patients. For example, a 10% increase in nurse turnover at nursing homes increases deficiency violations by almost 20% and increases mortality rates by between 9.4 and 17.4%.

A second Labor Center report on the impacts of the proposed legislation on the state budget is forthcoming.

Read the full report.

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Founded in 1964, the UC Berkeley Labor Center works to address the most critical challenges affecting working families in California and across the nation. The Center provides timely, policy-relevant research on labor and employment issues, and carries out training and education programs for labor leaders and students.