LOS ANGELES — Voters will decide in November whether California should raise its minimum hourly wage to $18 an hour by 2026 and pay workers what would be the highest state minimum wage in the nation.
That would be similar to Hawaii, where workers will earn at least $18 an hour by 2028 under a law passed two years ago.
Five states — including Alabama, South Carolina and Tennessee — do not have a minimum wage, although they are subject to the federal hourly minimum wage of $7.25.
California’s ballot measure, Proposition 32, would raise the state’s current minimum wage of $16 to $17 for the remainder of 2024 for employers with at least 26 employees, rising to $18 an hour beginning in January 2025. Without it, the state’s minimum wage is set. to increase to $16.50 an hour next year.
Small businesses with fewer than 26 employees must pay employees $17 an hour in January 2025 and $18 an hour in 2026.
Supporters of the measure say it will help low-wage workers support their families in one of the most expensive states to live in the country. Joe Sanberg, a wealthy investor and anti-poverty advocate, said the increase would provide a raise of $3,000 a year to more than 2 million Californians who earn the minimum wage.
He called the current situation happening in California “corporate welfare” because minimum wage workers working full-time are not making enough to survive without government assistance.
“If someone working full-time needs food stamps, doesn’t that mean we as taxpayers are subsidizing the difference between what employers have to pay for food and what they actually pay?” Sanberg said.
Opponents of California’s measure say it makes it difficult for businesses, especially small businesses with thin profit margins, to do so. He said the cost would be passed on to consumers and could lead to job cuts.
“Increase this, and the significance of how quickly it will increase will really have a huge impact on them and their ability to maintain 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. Since July, workers in Los Angeles have been paid an hourly minimum of $17.28.
West Hollywood has a $19.08 hourly minimum wage, but business owners aren’t happy either. A survey of 142 businesses commissioned by the city council found that 42% of them said they had to lay off employees or reduce working hours because of the regulations.
Fast-food workers in the state made $20 an hour in April under a law signed by Gov. Gavin Newsom. Democrats also approved legislation gradually increasing wages for health care workers to $25 an hour by July 2026.
Fast food prices rose 3.7% after the law took effect while employment remained stable, according to a working paper from the University of California, Berkeley. But franchises in Southern California have reported having to cut back hours because of wage increases.
University of Pennsylvania professor Ioana Marinescu, who studies the labor market and wage determination, said the minimum wage increase had no net effect on the overall employment rate.
“There are some positives, some negatives, but the average effect on employment is close to zero and is quite consistent across many studies,” Marinescu said.
Another common argument for raising the minimum wage is that low-paying jobs are often filled by students or younger workers who use them as stepping stones to higher-paying jobs.
But a report from the California Legislative Analyst’s Office found about half of low-wage workers are over 35 and more than a quarter are over 50. The lowest-wage occupations in the state are home health and personal care aides and more than half of workers are less that Latino.
Small businesses have suffered from inflation that has affected their bottom lines, said Juliette Kunin, who owns a gift shop in Sacramento called Garden of Enchantment. The business employs around six workers.
“I don’t want to see anyone who can’t support themselves and work full time,” said Kunin, who has mixed feelings about the move. “But, yes, if they don’t make pencils for us, then we won’t survive.”
Workers picketed outside the Sheraton Grand Sacramento Hotel this week to demand higher pay and better benefits. In the US this year, thousands of hotel workers have gone on strike to fight for fair wages and workloads due to COVID-era cuts.
Christian Medina makes $16 an hour plus tips as a party captain at the Sheraton Grand. He supported the proposition and hoped it would help workers provide for their families.
“It’s hard to get paid $16 an hour,” he said. “I want to be able to save money for my son so he can go to school, a good college.”
Some say that if the measure passes, it won’t go far enough.
Carmen Riestra, a uniformed hotel clerk who makes $19 an hour, said the $18 minimum wage is still not enough to live on in Sacramento.
Riestra loves her job and has worked at the Sheraton Grand for 11 years, but the employee workload has increased due to layoffs, she said.
“And the payment is only $19?” she said. “It’s not fair.”
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Austin reports from Sacramento, California, where he is a member of the Associated Press/Report for America Statehouse News Initiative corps. Report for America is a nonprofit national service program that places journalists in local newsrooms to report on hidden issues. Follow Austin on Twitter: @sophieadanna
