LOS ANGELES — Voters will decide in November whether California should raise its minimum wage to $18 by 2026, paying workers the highest state minimum wage in the country.
That would be similar to Hawaii, where workers are on track to earn at least $18 an hour by 2028 under a law passed two years ago.
Five states, including Alabama, South Carolina and Tennessee, have no minimum wage, even though they are subject to the federal minimum 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 an hour starting in January 2025. Without it, the state minimum wage would increase to $16.50 an hour next year.
Small businesses with fewer than 26 employees would be required to pay $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 in the country. Joe Sanberg, a wealthy investor and anti-poverty advocate, said the increase would provide a $3,000 annual pay raise for more than 2 million Californians who earn the minimum wage.
He called the current situation in California “corporate welfare,” because full-time minimum wage workers don’t make enough to survive without government assistance.
“If someone is working full-time and needs food stamps, doesn’t that mean that we as taxpayers are subsidizing the difference between what the employer would have to pay to pay for food and what they actually pay them?” Sanberg said.
Opponents of the California measure say it would be difficult for businesses to implement, especially small employers with tight profit margins. They show that the costs are being passed on to consumers and that it could lead to job losses.
“This increase, and the significance of how quickly it will increase, is really going to have a huge impact on them and their ability to continue to operate,” 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 an hour.
West Hollywood has a minimum wage of $19.08, but business owners aren’t happy about that either. A survey of 142 businesses commissioned by the City Council found that 42 percent said they had to lay off workers or cut their hours because of the ordinance.
Fast-food workers across the state got a $20-an-hour pay raise in April under a law signed by Gov. Gavin Newsom. The Democrat also approved legislation that would gradually raise wages for health care workers to $25 an hour by July 2026.
Fast-food prices rose 3.7% after the law went into effect, while employment remained relatively stable, according to a working paper from the University of California, Berkeley. But franchises in Southern California reported having to cut workers’ hours as a result of the wage increase.
University of Pennsylvania professor Ioana Marinescu, who studies the labor market and wage formation, said raising the minimum wage would have no net effect on overall labor force participation.
“There are some positives and some negatives, but on average the effect on employment is close to 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 serve as a stepping stone to better-paying jobs.
But a report from the California Legislative Analyst’s Office shows that about half of low-wage workers are over 35, and more than a quarter are over 50. The largest low-wage job in the state is home health aides and personal care workers, and more than half of low-wage workers are Latino.
Small businesses are already struggling with inflation that is hurting their bottom line, said Juliette Kunin, owner of a Sacramento gift shop called Garden of Enchantment. The business has about six employees.
“I don’t want anyone to be unable to earn an income and work full time,” said Kunin, who has mixed feelings about the measure. “But yeah, if we don’t pass, we’re not going to 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 across the U.S. have done just that this year, going on strike to fight for fair wages and a fair workload Cuts in the COVID Era.
Christian Medina makes $16 an hour, plus tips, as a banquet captain at the Sheraton Grand. He supports the bill, hoping it will help workers better 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 daughter so she can go to school, to a good college.”
Some say that even if the measure passes, it won’t go far enough.
Carmen Riestra, a uniformed clerk 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 workload for employees has increased in recent years because of job cuts, she said.
“And the pay is only $19?” she said. “That’s not fair.”