California Is Becoming a Minimum-Wage Laboratory
How high is too high? Economists don’t know exactly, but state lawmakers and voters might help them figure it out.
The hourly minimum wage in California for fast-food chains with more than 60 outlets is $20.
Photographer: Eric Thayer/Bloomberg
Among the 10 ballot proposals that Californians will vote on next week is one that would raise the state’s minimum hourly wage at employers with more than 25 employees to $17 immediately — which would be the highest state minimum in the US1— and $18 in January, with annual inflation adjustments after that. The minimum wage for smaller employers would rise to $17 in January and $18 in 2026.
This would not constitute what you could call a radical change for California, whose minimum wage is already $16 an hour with annual cost-of-living increases, and many coastal communities have higher minimums. What’s more, the state added a $20 minimum wage for fast-food chains with more than 60 outlets that don’t happen to be Panera Bread in April and imposed a $23 minimum wage on very large health-care employers on Oct. 16. Though support for Proposition 32 appears to be fading, meaning some of the calculations below could prove academic, it still seems timely to explore the possible consequences of the state’s minimum wage campaign of the past decade or so.