California’s minimum wage will still increase next year even with the coronavirus pandemic-induced recession, Gov. Gavin Newsom said Wednesday.

The governor declined to use his authority to suspend the scheduled pay hike for the state’s lowest paid workers, something he could have authorized because of California’s current economic conditions, according to a statement from his office.

The statewide minimum wage is slated to go up to $14 per hour for businesses with more than 25 employees, and $13 per hour for businesses with 25 employees or fewer on Jan 1, 2021.

“As we continue our efforts to slow the spread of COVID-19, we must also ensure that as our economy recovers, all Californians can benefit in its growth,” Newsom said in the statement. “Not allowing this increase to go forward will only make life harder for those Californians who have already borne a disproportionate share of the economic hardship caused by this pandemic.”

He noted the raise will help many employees on the front lines of the pandemic, including those working in hospitals and nursing facilities, at grocery stores and in the child care sector.

But the higher costs represent another challenge for businesses staggered by the coronavirus outbreak. Business groups say the increase could push even more restaurants, retailers and other small businesses toward disaster, as they struggle to survive amid the outbreak.

Beyond the minimum wage increase that is still months away, the governor announced more immediate aid to low-income Californians.

As of this week, state has provided more than $1 billion in much-needed financial relief to over 3.6 million families through the California Earned Income Tax Credit and Young Child Tax Credit, according to the statement.

Newsom expanded CalEITC last year to help struggling Californians become more financially secure, allowing those making up to $30,000 per year to qualify for the benefit. He also created a new tax credit to assist families with children under 6 years old.

Families who are eligible for CalEITC and have children under the age of 6 can get up to an additional $1,000 through the Young Child Tax Credit.

More than 400,000 taxpayers have taken advantage of the new program, according to the governor’s office.

“The CalEITC is providing critical relief for millions of low-income Californians and their families, many of whom were struggling before the COVID-19 pandemic and have been hit especially hard during this time,” Newsom said.

With many Californians still out of work due to statewide measures that forced numerous businesses to close to combat the spread of COVID-19, the state has been looking for ways to help those hit hardest financially by the pandemic.

California lawmakers are now mulling a $600 weekly unemployment benefit in the state as the federal government’s supplemental boost for that amount is set to expire this week.

Without additional action from the federal or state governments, jobless Californians will soon see their average benefit reduced to $340 per week, according to the Los Angeles Times.

Unemployment benefits have become a political flashpoint in the next stimulus bill, with congressional Republicans and Democrats divided over the amount the next measure should include.