Sacramento, CA — The state Senate is voting to increase California´s minimum wage by $1.25 an hour over two years, to $8 an hour by January 2008.
That will give California the nation´s highest minimum wage, barring increases in other states during that time.
Business groups say that will hurt the economy and drive up costs. But Governor Schwarzenegger is agreeing to the increase after Democratic leaders dropped a plan to include an annual cost-of-living adjustment.
The legislation would give nearly 1.5 million minimum-wage earners an increase of 75 cents an hour in January and another 50 cents the following year.