Choices
Ballot Question
Proposition 32: $18 Minimum Wage
The current minimum wage in California is $16/hour, following a 2016 state law that raised the minimum wage from $10/hour to $15 over several years. Proposition 32 proposes increasing the state’s minimum wage to $18/hour over two years, with future adjustments based on inflation: 1. On January 1, 2025, On January 1, 2025, the minimum wage would rise to $18/hour for employers with 26 or more employees, while smaller employers (fewer than 26 employees) would have a minimum wage of $17/hour. 2. On January 1, 2026, the minimum wage for all employees would be $18/hour. 3. Starting January 1, 2027, the minimum wage would be adjusted annually based on inflation. California’s high cost of living is well-documented. It is also important to note that California currently has several industry-specific minimum wage laws, and Prop 32 would not affect those existing laws. These include SB 525 (2023), which sets a $25 per hour minimum wage for healthcare workers starting in the 2024-2025 fiscal year, and AB 1228 (2023), which raised the minimum wage for fast food workers to $20 per hour in April 2024. The LAO notes that Prop 32 could have varied economic impacts. Businesses may face higher costs, potentially leading to price increases, lower profits, or staffing reductions. For state and local governments, expenses could rise due to higher wages, but might decrease as fewer workers qualify for entitlement programs like Medi-Cal and CalFresh. Additionally, increased incomes for minimum wage workers could lead to increased spending in the local economy. Overall, the net effect on state government costs is projected to stay within the high hundreds of millions annually. State and local revenues may decline in the short-term as some businesses experience profit reductions, but in the long-run may increase from the economic stimulus of more earnings for low-wage workers.