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Calif. Voters to Decide Minimum Wage Hike

SACRAMENTO, Calif. (CN) - A proposal to raise California's minimum wage to $15 per hour by 2021 will be decided on by voters this fall, state officials said Tuesday.

The Fair Wage Act of 2016 will join a crowded presidential-election ballot in November. The plan calls for increasing California's minimum wage by $1 each year until 2021.

In January the state's minimum wage increased to $10 per hour, while the federal wage remains $7.25.

Voters will have a chance to decide the issue after supporters, including Service Employees International Union-United Healthcare Workers West - one of the Golden State's largest labor unions - collected more than 423,000 voter signatures.

Supporters claim the initiative would impact more than 3.3 million Californians and send a message to other states mulling a minimum wage increase.

"California has often been the incubator of ideas and policies that spread across the country - this initiative fits that mold and will make our state the leader in the fight against income inequality," California Lt. Gov. Gavin Newsom said in a statement.

Reps. Loretta Sanchez, D-Garden Grove, and Janice Hahn, D-San Pedro, have voiced support for the initiative along with 28 state lawmakers. Backers point to a 2015 Field Poll showing that nearly 68 percent of registered voters support raising the state's wage floor as proof of its likely success this fall.

A second minimum wage initiative is still being circulated. That proposal by the Service Employees International Union would raise the wage to $15 per hour and also mandate an increase in employee sick time.

California Gov. Jerry Brown, who signed a minimum wage increase bill in 2013, has floated the possibility that lawmakers could craft a minimum wage plan of their own. If the Legislature does pass an alternative plan, the initiative's supporters can pull it from the ballot before the June 30 deadline.

Advocates claim raising the state's minimum wage would create millions in new income tax revenue and boost local economies. Currently, a full-time minimum wage employee working 40 hours per week makes less than $21,000 in California.

The state's nonpartisan financial analyst says raising the minimum wage to $15 per hour by 2021 would have an uncertain economic impact.

"Our best estimate is that this proposal would lead to a net change in combined state and local revenues ranging from a loss of hundreds of millions of dollars to a gain of over $1 billion," the Legislative Analyst's report states.

While raising the minimum wage would encourage more people to enter the workforce and allow them to spend more, the analyst says businesses would likely raise prices and find ways to employ fewer low-wage workers.

The initiative joins a crowded November ballot and becomes the seventh qualified proposal. Californians will have an opportunity to vote on issues such as the state's plastic bag ban , mandatory condom use in pornography and a Medi-Cal prescription drug price initiative.

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