Senator Padilla Introduces Legislation to Develop Living Wage Formula Tied to Housing Costs and Basic Expenses

Special to the Vanguard

Sacramento, CA – This week, Senator Steve Padilla (D-San Diego) introduced SB 352, a bill to create a formula that calculates a real living wage that a worker must make to afford basic housing in their region.

While California has one of the nation’s highest minimum wages at $15.50 per hour, it suffers some of the nation’s highest poverty rates due to high living expenses, primarily driven by housing and childcare costs.

According to United Way of California’s Real Cost Measure, 1 in 3 households in California – over 3.5 million families – do not earn enough to make ends meet.

The explosion of homelessness in California, while influenced by many factors, is clearly impacted by the high cost of living. One of the factors driving homelessness rates throughout the state is insufficient wages. In most major markets in California, workers need to work two fulltime minimum wage jobs in order to afford a one-bedroom apartment.

The current minimum wage was set by the Legislature in 2016. However, higher than expected inflation and rising demand for housing rendered the wage outdated faster than anyone could have anticipated. SB 352 would direct the Workforce Development Board, in coordination with the Secretary of Labor and Workforce Development, and the Housing and Community Development Department, to develop a calculation of what wage workers would need to earn in order to afford basic housing by county. This unique formula would be the first time the state would officially calculate wage needs to meet basic housing costs.

“The current wage standard dooms workers to around the clock labor just to make ends meet. California workers and their families should be able to afford housing in the communities that they work,” said Senator Padilla. “The cost of housing and goods and insufficient wages have incapacitated communities and created a class of individuals that cannot break the cycle of poverty. So much of our focus has been on the supply side of the problem – housing. Now we need to turn our attention to the real need for change in how workers are paid.”

This measure is the result of conversations with economists and housing experts, as California looks to address the housing crisis it faces. The United Ways of California in 2021 conducted a study entitled Struggling to Move Up: The Real Cost Measure in California, its fourth study cataloging the costs that families face throughout the state. The study analyzes what it takes for families to meet basic needs – including housing, food, transportation, health care, childcare, and taxes – and how many families earn below that threshold in every county in California.

“The approach Sen. Padilla is putting forward with SB 352, an assessment of what it actually costs families to be housed and meet basic needs, will identify significant gaps between what it costs for families and their children to live with dignity and what they actually earn,” said Peter Manzo, President & CEO of United Ways of California. “This should be the yardstick by which we set our priorities, and this bill would provide community and civic leaders, the business sector, and public officials a vital tool to help families not just survive but actually thrive.”

“United Way has been a leading voice on this issue for decades and I am proud to partner with them as we work to change the conversation of affordability in the state,” said Senator Padilla. “We need to find a solution that works for real people, and I am confident that with the help of their expertise and leadership, we can do exactly that.”

“My focus as a legislator is to create opportunities that empower families and create upward economic mobility for all Californians,” said Senator Padilla. “Working together with partners in labor and business, I want to develop strategies and solutions that will allow us to address long-standing inequities that have created economic barriers that too few are able to overcome.”

This is Senator Padilla’s first piece of legislation as a state senator.