Minimum wage hike faces veto too

The governor, who has unwisely staked his political fortunes to the anti-union pole, plans to veto a bill to raise the minimum wage:

Joined by three defections from a previously solid Republican wall of opposition, the Democrat-controlled California Legislature voted Wednesday to increase the state's minimum wage by $1 an hour over the next two years.

Gov. Arnold Schwarzenegger, who had offered to accept a more gradual increase in exchange for easing overtime rules, indicated that he was likely to veto the measure, as he did last year over a less extensive minimum wage increase...

Identical to last year's proposal, the Democratic measure would raise California's minimum wage to $7.25 an hour beginning in July. It would add another 50 cents to the rate starting in July 2007.

This year's measure would also establish automatic increases, known as indexing, to keep pace with inflation. That provision made the bill, AB 48, stronger than the legislation Schwarzenegger vetoed last year, when he said "now is not the time to create barriers to our economic recovery."

That should have read "gutting overtime rules":

People involved in negotiations that took place in recent days said Schwarzenegger offered to raise the minimum wage by $1 over two years if Democrats agreed to drop the automatic increases. The offer was also contingent on lawmakers classifying more types of employees as managers, so they would not have to be paid overtime, and also exempting from overtime employees who worked four 10-hour days instead of five eight-hour ones, according to administration and legislative officials.