The battle on whether to raise California’s minimum wage is about to take a new turn.

Next month, an obscure state agency will hold a hearing in downtown L.A. on whether to increase the state’s minimum from its current $5.75 an hour.

The five-member Industrial Welfare Commission has the authority to raise the minimum wage, with or without approval from the Legislature. And every two years, the commission is required to review the current minimum wage to see if it has kept pace with increases in the cost of living and the poverty threshold.

The Dec. 15 hearing is the first step in the review process; all told, it could take up to a year before the commission actually votes. Between now and then, various labor and business groups, as well as each of the 15 occupation-specific wage boards, will no doubt present reams of testimony on the subject.

“We believe the case for an increase is very strong,” said Sharon Cornu, a spokeswoman for the California Labor Federation. “The current minimum wage is woefully inadequate; it now takes an annual income in the $40,000 range to support a family in California; that’s two wage earners each making more than $17 an hour.”

Yet while the California Labor Federation has petitioned the IWC, it has not yet specified how much of a minimum-wage boost it will seek. In fact, no target minimum wage level has yet been set by any group.

“It is up to the IWC to determine the figure,” Cornu said. “We pointed out that the minimum wage in Washington and Oregon is $6.50 an hour. The cost of living in California is much higher than in Oregon, and we hope the commission looks at the minimum wage in that context.”

The California commission could ultimately decide to hike the minimum to $6.50 an hour, $7 an hour, or possibly even higher. It also could decide to leave it alone, although that is considered unlikely. (Conceivably, the IWC could be preempted by the state Legislature if it acts to raise the minimum wage in its session next year.)

Gov. Gray Davis could play a big hand in the eventual vote. By law, the IWC must have two representatives from labor and two from business. The fifth member is appointed by the governor to represent the public at large. That post is now held by John McCarthy, whose term expires Jan. 15.

Given the Davis administration’s slow pace in making appointments, it could be several months before a replacement is named, which could drag out the wage-review process even longer.

The last two hikes in the state’s minimum wage, in 1996 and 1997, were first passed by the Legislature and then approved by a majority of the state’s voters. While the IWC has the authority to raise the minimum wage on its own, it hasn’t done so this decade.

Critics charge that the commission has been inactive because its members were appointed by Republican governors who were opposed to raising the minimum. But in recent months, pressure has been building on the commission to do so.

On Oct. 1, the California Labor Federation petitioned the IWC board for a wage hike. On the congressional agenda for next year is a national minimum wage hike from the current $5.15 an hour to $6.15. (Initially brought up for consideration in this month’s budget debate, it was tabled until next year.)

What’s more, recent studies have shown that housing and other necessities are increasingly out of reach for minimum-wage workers. One such study, released in September, found that it would take two workers with minimum-wage jobs more than 80 hours a week each to afford the average $1,140-a-month rent for an apartment in L.A. County.

The IWC is seeking information from the state’s Employment Development Department on the number of workers at each wage level, from $4.25 an hour (for officially classified apprentices) to $7 an hour, even though the official state minimum wage is $5.75.

In part because no minimum-wage boost has been specified, the state’s business community has yet to mobilize on the issue. In fact, at least one business organization the California Chamber of Commerce appears open to a moderate hike in the minimum wage, as long as sufficient lead time is given for employers to implement it.

“We would have to look at the dollar amount and how long the business community is given to implement it. If it’s reasonable, we’re open to compromise,” said Julie Broyles, director of insurance and employee relations for the California chamber.

But Broyles added that the chamber would prefer to wait until the federal minimum is raised, then peg California’s to that rate, so that California’s wage level is not out of line with surrounding states.