By Steve Gorman

LOS ANGELES (Reuters). California’s minimum wages will increase to $15.50/hour for all workers in California on January 1, 2023 under an automatic inflation trigger, which was built into state law, but has never been activated. According to the governor’s Office projections on Thursday.

It was announced just a day before Gavin Newsom, a former Democrat governor, was scheduled to present his updated budget plan to state legislators controlled by his party. This included a $11.8 million inflation-relief package.

Similar to the one that California passed last year in order to recover from COVID-19, this economic stimulus plan includes Newsom’s recent preview of a $400 tax reduction for vehicle owners. This will help to offset rising gasoline prices.

Newsom stated that his plan taps into an “historical” surplus in the state’s budget to assist individuals and families with rising living costs. The state Finance Department predicts that it will increase 7.6% between fiscal years 2021-2022.

The Finance Department believes that 3,000,000 workers will benefit from Newsom’s first inflation-based minimum wages hike, which is expected to be implemented under a 2016 labor law.

The law provides for an automatic 50c per-hour rise above California’s current minimum wage levels. This is the maximum any state can require of larger businesses.

The statewide minimum wages for 26- and more employees, as well as those employing 25 or less workers will increase to $15.50 each in the coming year. The minimum wage required for small businesses was set to reach $15 by January without an inflation trigger. This is in line with what the larger companies now require.

Two states, Washington and Massachusetts, have a minimum wage of $14.49 an hour higher than California’s. U.S. Labor Department statistics show that they are required at least $14.25 per hour and $14.49 respectively for all businesses.

Higher at $15.20 an hr, District of Columbia pays even more. The U.S. Federal Minimum Hourly Wage is $7.25.

Newsom’s inflation package also includes $2.7 billion for emergency rent assistance to low-income tenants, and $1.4 billion to assist utility customers with their overdue bills.

California Republican Party released a statement asking the legislature to repeal state gasoline taxes. This was “the best way to alleviate pain at the pump.”