From Jeanne Kuang of CalMatters’ California Divide team
Wednesday, legislators advanced a union-backed proposal to require a $25 minimum wage for a wide range of health care workers, including hospital janitorial and food service staff — many of whom donned union capes at the Capitol to testify in support.
The bill, authored by Los Angeles Democratic Sen. Maria Elena Durazo, comes after the state’s largest health care worker union put similar measures on two southern California city ballots last fall. Voters approved the wage hike in Inglewood and rejected it in Duarte. California’s minimum wage is $15.50 this year, though it’s higher in several cities and counties including Los Angeles County, and voters in 2024 will get to decide whether to raise the statewide minimum to $18.
The proposal is sure to be one of the session’s more controversial labor bills, with both sides pointing to the health care workforce shortage. SEIU California and the California Labor Federation say health care workers remain underpaid despite being deemed essential during the pandemic. Provider organizations are opposed, arguing hospitals and clinics cannot afford the increase. The California Chamber of Commerce lists the bill as a “job killer.”
The UC Berkeley Labor Center estimates 469,000 workers would get a raise under the bill, including those who make slightly more than $25 who would likely get their own corresponding pay bump. The average increase would be nearly $5.75 an hour, the center found, and operating costs would go up by about 3% — though researchers said there is “large variation across types of facilities.”
Sen. John Laird, a Salinas Democrat, said he was concerned struggling rural hospitals could not afford the hike, pointing to the closure of the Madera hospital and the precarious financial status of several others. He noted hospitals in wealthy coastal communities in his district already pay at least $25 an hour.
- Laird: “I just think certain parts of the system might have a real problem.”
Meanwhile, a committee hearing on a bill to aid struggling rural hospitals was put off Wednesday. But as CalMatters’ health reporter Ana B. Ibarra explains, the state of hospital finances is still front and center.
One in five of California’s hospitals are in an “unsustainable financial position” and deemed at risk of closing, according to a new report commissioned by the California Hospital Association
Hospitals considered at-risk are losing more money than they are making, have decreasing cash balances and increasing debt, said the report, which sampled 114 hospitals. Among the findings: Hospitals spent about $23.4 billion more providing care in 2022 than in 2019, in part due to the increased cost of labor, drug and supplies.
Hospitals have been citing the closure of Madera Community Hospital, a 106-bed facility that shut its doors at the beginning of this year, as a worst-case-scenario example in their requests for aid to Newsom and legislators. Despite the state’s projected budget shortfall, hospitals want $1.5 billion in immediate relief from the state. They also want increased pay for the care they provide to Medi-Cal and Medicare patients.
Some struggling hospitals are looking for buyers or seeking new leadership teams that could help dig them out of their financial holes. For example, Imperial County’s El Centro Regional Medical Center, which recently closed its maternity ward, announced that it has hired a new CEO, who will start Monday.
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