California governor Jerry Brown has announced a deal to raise the state minimum wage to $15 per hour by 2022, marking the largest victory to date of the national “Fight for $15” campaign to raise pay for low-income workers. 

“It’s a matter of economic justice, it makes sense, and it will help our entire state do much better for its citizens,” Brown said at a midday press conference announcing the proposal. “Once again California is showing we can do right by workers, we can advance our economy, and we can do it by the legislative process.”

Under the terms of the proposal, the state minimum wage, which is currently $10.00, will increase by $0.50 per year for two years, and then $1 per year for four years, until it reaches $15 in 2022. Businesses with 25 or fewer employees will have an additional year to phase in the increases. Beginning in 2024, the wage will be indexed to inflation. The deal extends paid sick days to home-care workers and includes “off ramps” that allow the governor to delay implementation in the event of a recession or budgetary shortfalls.

Brown was joined by labor leaders, workers, and California Senate president pro tempore Kevin de León, who noted that the bill will benefit 5.6 million workers, or 32% of the state’s workforce. 

“In the wealthiest state in the wealthiest nation on earth, no one who works full-time should have to live in poverty,” de León said. “Today’s move shows that California knows how to lead at a time when some states in the US are moving to even reduce minimum wages. We are the nation before the nation becomes itself.” 

California is the eighth-largest economy in the world, and the proposed increase would give it the highest minimum wage in the world. Australia’s AUD $17.29 (US $13.04) is currently the highest national minimum wage. 

Though the federal minimum wage in the US has languished at $7.25 since 2009, many cities and states have moved to enact higher labor standards, including San Francisco, Los Angeles, and other California municipalities.

On 2 March, Oregon enacted a tiered minimum wage law that would raise pay to $14.75 in Portland, the state’s largest city, by 2022. New York is also reportedly nearing a deal to increase the state minimum wage to $15, and New Jersey legislators may seek a constitutional amendment to increase the state minimum wage if Republican governor Chris Christie vetoes a $15 per hour bill.

But while some states work to catch up with local increases, others are throwing up roadblocks. According to BuzzFeed, 19 states have passed legislation blocking “political subdivisions” such as cities and counties from raising minimum wages locally.

“I would like to thank every worker out there who stood up for themselves and their families in asking for $15 per hour,” said Holly Dias, a Burger King worker who spoke at the press conference. “I’ve had to choose between feeding me and my child, buying bus passes, and paying rent. I love my job, but I love my family more.”

Fast food workers like Dias have become the face of the campaign to raise the minimum wage in recent years.

In November 2012, fast food workers in New York City went on strike to demand $15 per hour wages, touching off a national campaign for increased wages that has seen waves of one-day strikes by restaurant, airport, Walmart, home-care, and other workers across the country. The national campaign has received financial and organizing support from the Service Employees International Union.

“The Fight for $15 is winning historic changes no one would have thought possible just a few years ago,” said Christine Owens, executive director of the National Employment Law Project, in a statement. “California’s $15 minimum wage will mean big raises for more than 1 in 3 workers in the state, reversing years of falling pay.”

Minimum wage increases have long been opposed by business interests. California Consumers Against Higher Prices (CCAHP), a coalition that includes the California Restaurant Association and the California Chamber of Commerce, formed in early March to oppose a proposed ballot initiative that would have also sought to increase the minimum wage to $15 per hour.

In a statement, CCAHP called the minimum wage plan “overreaching” and said it would have “devastating impacts ... on [voters’] lives from education cuts, increased costs to seniors, services for the disabled, and the small businesses and jobs in their neighborhood.”

“It is imperative that lawmakers listen to the voices of their constituents and think about the well-being of their districts before bowing to the will of special interest groups,” the group said.

But Ken Jacobs, chair of the UC Berkeley Labor Center, argued that any negative impacts of minimum wages are offset. 

“Higher wages are a benefit to firms because they create a market for their products. We estimate that the impacts on the economy will be very small and the benefit for workers will be very big,” he said. 

Jacobs also dismissed concerns that businesses will move jobs out of California. 

“We’ve had big wage differentials between California and Texas for a long time,” he said. “But Silicon Valley is still happening here.”