Gov. Arnold Schwarzenegger vetoed an Assembly bill on Saturday that would have raised the minimum wage in California $1 per hour by July 2006.

In his veto message regarding AB 2832, the governor said the wage hike would cost businesses $3 billion to $4.4 billion dollars and discourage business and job growth in the state.

“We have launched California’s recovery by making our state a more attractive place to do business, so that employers will stay in our state, expand in our state, and create more jobs here,” Schwarzenegger said in a written statement. “Now is not the time to create barriers to our economic recovery or reverse the momentum we have generated. I want to create more jobs and make every California job more secure.”

Assemblywoman Sally Lieber (D-Mountain View) authored the bill that would have raised the minimum wage from $6.75 per hour to $7.25 per hour on July 1, 2005 and then $7.75 on July 1, 2006.

“Even though a couple hundred dollars a month doesn’t make a difference to our governor, it does make a difference to low-income families,” Lieber said.

During the legislative process, polls done by supporters of the bill showed an average of 70 percent of voters agreed the minimum wage should be raised, she said.

“When most voters think about if they can live on $6.75 an hour, the answer is no,” Lieber said.

International business major Shasta Burnach said the minimum wage is too low. As a waitress in Costa Mesa she relied on her tips, which made up the majority of her income.

“I probably wouldn’t have even noticed [a wage increase],” Burnach said.

San Francisco voters approved an $8.50 minimum wage this year but Eli Taylor said he still works two jobs to make ends meet. He works as a server at a restaurant and promoter.

“I spend like $2,000 a month just maintaining life; insurance, car maintenance, gas, bridge tolls,” said Taylor, a graphic design and marketing major.

The minimum raise increase in San Francisco hit employers hard, according to one SF State restaurant manager who asked that he remain anonymous. Salaried employees are given smaller bonuses and long-term employees are upset that new hires earn the same amount they worked years to obtain, he said.

“It hurts the employers, it hurts the managers, it hurts a lot of people,” the manager said.

Lieber said she would regroup with women, minority, labor and faith-based groups that supported the bill to discuss the next step. She said if supporters feel the minimum wage bill could be successful, she would reintroduce it to the state legislator. She is also considering a ballot initiative to take the subject directly to the voters.

Lieber said the current minimum wage is 88 cents below the poverty line, which means those workers rely on the state to meet many of their needs. The majority of those workers are the breadwinners, women and minorities, she said.

“It’s just an indicator that our recovery is going to be on the backs of women and people of color,” Lieber said.