California Senate passes $25 minimum wage for healthcare workers

A $25 minimum wage bill for healthcare workers was passed this week in the California Senate. The partisan bill did not receive a single Republican vote in its 21-11 passage.

Authored by Senator Maria Elena Durazo (D-Los Angeles), and championed by the Service Employees International Union, the bill proposes to increase the state’s minimum wage for healthcare workers.

Healthcare workers at general acute care hospitals, acute psychiatric hospitals, medical offices and clinics, behavioral health centers, dialysis clinics and residential care centers as well as as certified nursing assistants, patient aides, technicians, and food service workers, among many others can all expect a wage increase, if the bill becomes law. All paid work performed on the premises of any covered health care facility, regardless of the identity of the employer qualifies for the increase.

The proposed wage increase would be incremental at first. Starting on June 1, 2024 the minimum wage would rise to $21 per hour for one year, then increase to $25 per hour if it passes in the assembly.

A report by UC Berkeley’s Labor Center estimates an increase in operational costs at health facilities by 3% as a result of a $25 minimum wage which would elevate pay by about $5.74 for each eligible healthcare worker.

SB 525 has massive union support. SEIU represents 2 million members in healthcare, the public sector and property services in the United States, Canada and Puerto Rico. Last week members marched on the state Capitol, then descended on to the headquarters of the California Hospital Association and California Primary Care Association to demand a $25 minimum wage for healthcare workers.

“This bill imposes a top-down wage increase for all healthcare workers that does not account for the current economics of health care or the unique circumstances of health care providers in local communities in a state as large and diverse as California. SB 525 will in fact reduce access to medical services, increase health care costs, and diminish health care employment opportunities,” Rony Berdugo, Vice President, State Advocacy for the hospital association said in a letter to the Senate appropriations committee in April.

A study by the California Hospital Association estimates that the total annual increase in cost to the health care system will be about $8 billion beginning in 2024, rising to $11.3 billion (in constant 2024 dollars) by 2030.

“This comes at a time when California hospitals continue to grapple with an unprecedented financial crisis, and patients are already seeing a degradation in their access to health care services,” said Carmela Coyle, President & CEO, California Hospital Association, Sacramento.

The group is part of a broad coalition opposing this bill.

Hospitals in California experienced staffing shortages pre-Covid and the pandemic pushed many healthcare workers to exhaustion, further exacerbating the situation. Then, the state mandated vaccine requirement resulted in more nurses leaving the profession further straining understaffed hospitals. One in five hospitals in California risk closure according to the Kaufman Hall report. The state’s hospitals have suffered a financial loss in excess of $20 billion over the past three years, despite federal Covid relief funds.

“I’m glad that the State Senate listened to healthcare workers like me and heard the truth about how we are exhausted and burned out, how short staffing means we are doing double and triple work, and how our patients are left waiting to get the care they need,” said Mirell Vong, a patient registration representative at Mercy Hospital of Folsom. “I’m glad they weren’t fooled by hospital industry lobbyists who claim they don’t have the money to pay us better when we know the truth: they are raking in profits and paying executives million-dollar salaries.”