Golden State workers will see another increase in the state's minimum wage come 2027.
Gov. Gavin Newsom announced Friday that California's statewide minimum wage will increase to $17.40 an hour starting Jan. 1, 2027, under the state's annual inflation adjustment.
The increase is automatic under California law, which adjusts the statewide minimum wage each year to keep pace with the state's inflation rates.
State officials said the new rate will be the highest statewide minimum wage in the country, and nearly two-and-a-half times the federal minimum wage of $7.25 an hour.
"For years, Donald Trump and Republicans have blocked efforts to raise the federal minimum wage while handing tax breaks to billionaires and big corporations," Newsom said in a statement. "California has chosen a different path — one that rewards work, grows the economy, and puts working families first. We believe if you work hard, you deserve a decent paycheck. They think $7.25 an hour is enough. We don't."
The new statewide minimum wage takes effect Jan. 1, 2027. Some California cities and counties already require employers to pay local minimum wages that exceed the statewide rate.
That is why some California minimum wage workers have already seen higher pay rates.
Golden State workers in several cities received pay raises July 1, as annual local minimum wage increases took effect in cities such as Berkley, Los Angeles, San Francisco and Santa Monica.
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The latest round of increases comes roughly two years after California raised the minimum wage for qualifying fast-food workers to $20 an hour at restaurant chains with at least 60 locations nationwide. The landmark law, which took effect April 1, 2024, made California the first state to establish a separate statewide minimum wage for the fast-food industry.
The law remains the subject of debate.
Labor advocates have championed the law as a vital step toward a living wage. The law boosted earnings for hundreds of thousands of fast-food workers in the state.
Meanwhile, a study released in March by researchers at the University of California, Santa Cruz found the higher wage was associated with higher menu prices, reduced employee hours and increased automation that could replace workers.
"Based on what we've found, I think this legislation is a classic case of 'no good deed goes unpunished,'" Stephen Owen, a researcher at UCSC, said in the report. "There are unintended consequences and knock-on effects, and overall, I think the results have definitely not been as positive as policymakers had been expecting."
Another closely watched wage proposal has hit a roadblock. Los Angeles has delayed its plan to raise the minimum wage for hotel and airport workers to $30 an hour.
The measure, dubbed the "Olympic Wage" by supporters, was intended to be in place by the 2028 Olympic and Paralympic Games. However, the city has postponed full implementation until 2030.
More California News:
Staffer Patcher Kristina Houck contributed to this report.
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