California Voters to Decide on $18 Minimum Wage

LOS ANGELES — California voters will decide in November whether to raise the state’s minimum wage to $18 per hour by 2026. This would make California’s minimum wage the highest in the nation.

Hawaii is currently on track to reach a $18 per hour minimum wage by 2028, making it the only other state with a similar plan.

Five states, including Alabama, South Carolina, and Tennessee, do not have a state minimum wage and rely on the federal minimum wage of $7.25 per hour.

Proposition 32, the California ballot measure, would raise the state’s current minimum wage from $16 to $17 for the remainder of 2024 for employers with 26 or more employees. Starting in January 2025, the minimum wage would rise to $18 per hour. Without Proposition 32, the state’s minimum wage is scheduled to increase to $16.50 per hour next year.

Small businesses with fewer than 26 employees would be required to pay their employees $17 per hour starting in January 2025, and $18 per hour in 2026.

Supporters of the measure argue it will help low-wage workers support their families in one of the most expensive states to live in. Joe Sanberg, an investor and anti-poverty advocate, says the increase would give a raise of $3,000 per year to over 2 million Californians earning minimum wage.

He calls the current situation in California “corporate welfare” because minimum wage workers working full-time cannot afford to live without government assistance.

“If someone who’s working full-time needs food stamps, doesn’t that mean that we as taxpayers are subsidizing the difference between what their employer should be paying them so that they could afford food and what they actually are paying them?” Sanberg said.

Opponents of the California measure warn that it would be difficult for businesses, especially small businesses with thin profit margins, to implement. They argue that the cost would be passed on to consumers and could lead to job cuts.

“This increase, and the significance of how quickly it’s going to increase will really have a huge impact on them and their ability to maintain their business operations,” said Jennifer Barrera, president of the California Chamber of Commerce.

Nearly 40 California cities, including San Francisco, Berkeley, and Emeryville in Northern California, already have local minimum wages higher than the state’s. Since July, Los Angeles workers have been paid a minimum of $17.28 per hour.

West Hollywood has a minimum wage of $19.08 per hour, but business owners there are unhappy. A survey of 142 businesses commissioned by the city council found that 42% of them reported having to lay off employees or cut hours due to the higher wage requirement.

Fast food workers across California received a wage bump to $20 per hour in April under a law signed by Governor Gavin Newsom. The Democrat also approved legislation to gradually raise wages for healthcare workers to $25 per hour by July 2026.

Fast food prices increased by 3.7% after the law took effect, while employment remained relatively stable, according to a working paper from the University of California, Berkeley. However, franchises in Southern California reported having to cut worker hours as a result of the wage increase.

Ioana Marinescu, a University of Pennsylvania professor who studies the labor market, said increasing the minimum wage has not shown a clear effect on the overall employment rate.

“There’s some positive, some negative, but on average the effect on employment is close to zero and that’s quite consistent across many studies,” Marinescu said.

Another common argument against raising the minimum wage is that low-paying jobs are often filled by students or young workers looking for stepping stones to higher-paying jobs.

However, a report from the California Legislative Analyst’s Office found that roughly half of low-wage workers were over the age of 35, and over a quarter were over 50. The state’s largest low-wage occupation is home health and personal care aides, with over half of low-wage workers being Latino.

Small businesses have already been struggling with inflation impacting their bottom line, says Juliette Kunin, owner of a gift store in Sacramento called Garden of Enchantment. The business employs about six workers.

“I don’t want to see anybody not being able to support themselves and working full time,” said Kunin, who has mixed feelings about the measure. “But, yeah, if it doesn’t pencil out for us, then we aren’t going to be able to survive.”

Workers picketed outside the Sheraton Grand Sacramento Hotel this week demanding higher pay and better benefits. Across the US, thousands of hotel workers have gone on strike this year to fight for fair pay and workloads after COVID-era cuts.

Christian Medina makes $16 per hour plus tips as a banquet captain at the Sheraton Grand. He supports the proposition and hopes it will help workers better provide for their families.

“It’s hard getting paid $16 an hour,” he said. “I want to be able to save money for my daughter so she can go to school, go to a good college.”

Some argue that even if the measure passes, it wouldn’t be enough.

Carmen Riestra, a uniform attendant at the hotel who makes $19 per hour, says an $18 minimum wage would still not be enough to afford living in Sacramento.

Riestra loves her job and has worked at the Sheraton Grand for 11 years, but she says the employees’ workloads have increased in recent years due to job cuts.

“And the payment’s only $19?” she said. “That’s not fair.”