CA Proposition 32: California's Minimum Wage Hike Measure Explained

CALIFORNIA —California looks poised to give itself a raise. According to recent polls, 52 percent of Californians support Proposition 32, a ballot measure that would increase the state minimum wage from $16 an hour to $18 an hour by 2026 for all employers across the state.

If the proposition passes, businesses with more than 26 employees would need to pay $18 an hour or more starting Jan. 1, 2025. Businesses with 25 or fewer employees would need to pay at least $17 an hour in 2025 and $18 an hour by 2026.

Starting in 2027, the minimum wage would be tied to the Consumer Price Index and will continue to be adjusted up to 3.5 percent a year for inflation.

If approved, California would have the highest minimum wage of any state in the country, and nearly three times as high as the federal minimum wage of $7.25 an hour.

The ballot question reads as follows:

“You are being asked: Should California increase its minimum wage from $16 an hour to $18 an hour. The proposal would increase the minimum wage at different speeds depending on the size of a company. For employers with 26 or more employees, the minimum wage would go up on Jan. 1, 2025. For smaller companies, it would go up on Jan. 1, 2026. Yearly increases thereafter would be tied to the consumer price index.”

In 2016, the California State Legislature passed a bill to raise the minimum wage to $15 an hour by 2022, and tied automatic increases to the Consumer Price Index. That same year, wealthy investor and anti-poverty advocate Joe Sanberg helped put forth the Living Wage Act of 2022, which did not make the ballot that year because an administrative deadline was missed.

Sanberg and his allies say that the current minimum wage is not sufficient for living in one of the country’s most expensive states.

“Many working Californians, including essential workers, parents and seniors, have full-time jobs yet struggle to make ends meet. The minimum wage has not kept pace with the cost of living and is worth less today than it was 50 years ago,” reads the text of the Living Wage Act. “Forty-six percent of low-wage workers have children, and 40 percent are married. Californians cannot support a family on the current minimum wage of $15 per hour, or $31,200 per year, for people working full-time.”

To comfortably support two children in California, workers would need to make $50 an hour to get by, which would translate to roughly $104,000 a year. A SmartAsset study used the MIT Living Wage Calculator and found that to live comfortably in a major city in California, a single person would need to make about $96,500 a year, and a family of four would need to make at least $235,000 to avoid living paycheck to paycheck.

Several municipalities in California have already passed higher minimum wage laws, including West Hollywood, which in December 2023 raised its minimum wage to $19.08 an hour, the highest in the country. Still, based on the numbers listed above, many activists want more. In Los Angeles, hotel and airport workers are demanding a $25 minimum wage, and a raise to $30 an hour by the time of the 2028 Olympics. Last year, unions secured hikes of $25/hr for healthcare workers, and $20/hr for fast food workers.

Although labor groups do not think the target number is high enough, they have still raised nearly $11.49 million in support of the ballot measure, according to CalMatters. Supporters include the California Labor Federation, Unite Here, One Fair Wage, and the Working Families Party California. Sanberg donated $10,875,000 of his own money to support the proposition.

Business groups like the California Chamber of Commerce, California Restaurant Association, California Grocers Association, and National Federation of Independent Businesses have come out against the proposition, though they have only raised $55,000 to fight it. Opponents have said that employers already face increased costs from inflation and have not fully recovered from the COVID-19 pandemic. Opponents point to surveys from West Hollywood businesses, which indicate that 42 percent of West Hollywood businesses have laid off workers or cut hours in response to the city’s $19.08 minimum wage.

"Market, not politicians and bureaucrats, ought to be dictating the financial growth and success of working men and women in California,” said John Kabateck, state director of the National Federation of Independent Business. “Let the market dictate this and let’s stop sending the message that mediocrity is a pathway to professional success in California."

A poll from July 31 to Aug. 11 by the UC Berkeley Institute of Governmental Studies shows that 52 percent of Californians support the measure, 34 percent oppose it, and 14 percent are undecided. A University of Southern California poll from January shows 59 percent support the proposition, 34 percent oppose it, and 8 percent are unsure.