LOS ANGELES — Voters will decide in November whether California should raise the minimum hourly wage to $18 by 2026 and pay workers what would be the highest statewide minimum wage in the country.
That would be similar to Hawaii, where workers are on track to be paid 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 minimum hourly wage of $7.25.
California’s ballot measure, Proposition 32, would raise the state’s current minimum wage from $16 to $17 for the remainder of 2024 for employers with at least 26 employees, rising to $18 per hour starting in January 2025. Without this measure, the state minimum wage will be set. to increase to $16.50 per hour next year.
Small businesses with fewer than 26 employees would have to pay $17 per hour in January 2025 and $18 per hour in 2026.
Supporters of the measure say it will help low-wage workers support their families in one of the most expensive states in the country. Joe Sanberg, a wealthy investor and anti-poverty advocate, said the increase would provide a $3,000 annual wage increase for more than two million Californians earning the minimum wage.
He called California’s current situation “corporate welfare,” because minimum-wage workers who work full-time don’t make enough to survive without government help.
“If someone who works full-time needs food stamps, doesn’t that mean that we as taxpayers are subsidizing the difference between what the employer would have to pay them so they can afford food and what they actually pay them?” said Sanberg.
Opponents of the California measure say it would be difficult for businesses to implement, especially small employers with tight profit margins. They claim the costs would be passed on to consumers and could lead to job losses.
“This increase, and the significance of how quickly it will increase, is really going to have a tremendous 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 – have local minimum wages that are higher than the state. Since July, workers in Los Angeles have been paid a minimum wage of $17.28 per hour.
West Hollywood has a minimum hourly wage of $19.08, but entrepreneurs are not happy with that either. A survey of 142 businesses commissioned by the city council found that 42% of them said they had to lay off employees or cut their hours because of the ordinance.
Fast food workers across the state got a raise to $20 an hour in April under a law signed by Gov. Gavin Newsom. The Democrat also approved legislation that would gradually increase 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 relatively stable, according to a working paper from the University of California, Berkeley. But franchises in Southern California reported that he had to cut hours for employees as a result of the wage increase.
Professor Ioana Marinescu of the University of Pennsylvania, who researches the labor market and wage setting, says raising the minimum wage would not have any net effect on overall labor force participation.
“There are some positive ones, some negative ones, but on average the effect on employment is almost zero and that’s pretty consistent across many studies,” Marinescu said.
Another common argument against raising the minimum wage is that these low-paying jobs are often filled by students or younger workers who are used as a stepping stone to higher-paying jobs.
But a report from the California Legislative Analyst’s Office shows that roughly half of low-wage workers are over age 35, and more than a quarter are over age 50. The state’s largest low-wage occupation is home care aides and personal care, and more than half of low-wage workers are Latino.
Small businesses already struggle with inflation that affects their bottom line, said Juliette Kunin, owner of a gift shop in Sacramento called Garden of Enchantment. The company employs approximately six employees.
“I don’t want anyone to be unable to earn a living and work full-time,” says Kunin, who has mixed feelings about the measure. “But yes, if we don’t succeed, we won’t be able to survive.”
Workers protested outside the Sheraton Grand Sacramento Hotel this week to demand higher wages and better working conditions. Thousands of hotel workers in the US have done just that this year went on strike to fight for fair wages and a fair workload Budget cuts in the COVID era.
Christian Medina makes $16 an hour, plus tips, as a banquet captain at the Sheraton Grand. He supports the proposal and hopes it will help workers better care for their families.
“It’s hard to get paid $16 an hour,” he said. “I want to be able to save money for my daughter so that she can go to school, to a good university.”
Some say that even if the measure passes, it would not go far enough.
Carmen Riestra, a uniform attendant at the hotel who makes $19 an hour, said an $18 minimum wage still wouldn’t be enough to live in Sacramento.
Riestra loves her job and has worked at the Sheraton Grand for 11 years, but the employee workload has increased in recent years due to job losses, she said.
“And the payment is only $19?” she said. “That’s not fair.”
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Austin reported from Sacramento, California. She is a staff member for the Associated Press/Report for America Statehouse News Initiative. Report for America is a nonprofit national service program that places journalists in local newsrooms to report on undercovered issues. Follow Austin on Twitter: @ sophieadanna