Prop 32 raises minimum wage

The official name for Proposition 32 is “Raises Minimum Wage.”

Prop 32

In stages, Prop 32 would raise the current California minimum wage from
$16 per hour to $18 per hour by 2026. Employers with more than 26
employees or more would have to raise their wages to $18 per hour in

2025. Employers with less than 26 employees would have to raise their
      wages to $17 per hour in 2025. By 2026, all employees covered by the
      State’s minimum wage law would have to make, at least, $18 per hour.

Under current law, the State’s Legislative Analyst’s Office estimates
that the California minimum wage would be $16.50 per hour in 2025 and
$17 per hour in 2026. The last legislative increase was in 2016.

Background

Prop 32 would not change any local or industry-specific minimum. For
example, in April 2024, the minimum wage for fast food workers in
California was increased to $20 per hour. Healthcare workers are to
begin getting raises either Oct. 1, 2024, or Jan. 1, 2025, which should
result in a minimum wage of $25 per hour over the next few years. These
increases are not affected by Prop 32.

Various localities throughout the State have their own minimum wage
laws, too. For example, for 2024, it is $16.85 in San Diego and $17.80
in Palo Alto. The local minimum wage laws are also not affected by Prop
32.

Current state law ties the statewide minimum wage to the Consumer Price
Index, so there may be increases each year, due solely to increases of
3.5% or more in the CPI, without any legislative action.

Consequences

People earning only the minimum wage would see wage increases over the
next two years. When the fast-food worker increase was about to be
implemented, there was concern on how that would affect either inflation
or employment of fast food workers.

The latest data suggests that neither result has occurred yet. Research
by Michael Reich, at the University of California, Berkeley, shows that
prices of MacDonald’s fare have increased, less than 2%.

“According to new state and federal employment data, California’s
fast-food industry has added jobs every month this year,” Gov. Gavin
Newsom reported in a press release last week. As of the end of July, the
total number of California fast food workers is now slightly more than
750,000, which is greater than the workers in the industry in July 2023,
and an increase of 11,000 since the April wage increase.

“What’s good for workers is good for business, and as California’s
fast-food industry continues booming every single month our workers are
finally getting the pay they deserve,” Newsom said in his press release.
“Despite those who pedaled lies about how this would doom the industry,
California’s economy and workers are again proving them wrong.”

However, a recent “Forbes” article reported, “There has been an increase
in automation and self-service technology. Restaurants are deploying
self-order kiosks, kitchen automation software and other labor-saving
technologies to reduce reliance on human workers.

“Restaurants like McDonald’s, Burger King, Shake Shack, Panera Bread are
deploying self-service kiosks that allow customers to place orders
themselves, reducing the need for human cashiers. The self-ordering
systems offer improved precision in order-taking and tend to encourage
higher spending from customers.”

The LAO concluded, “Higher wages would increase costs for many
businesses. . .. The overall price increase from Proposition 32 likely
would be smaller than one-half of 1 percent [and] . . . The number of
jobs in the state could go up or down. This change likely would be
smaller than one-quarter of 1 percent.”

Proponents

Joseph Sandburg, an anti-poverty advocate, wrote the Voter’s Guide
support for Prop 32. “By raising the minimum wage to $18 per hour,
Proposition 32 will bring a much-needed raise to 2 million California
workers and create a more prosperous system where big corporations
aren’t allowed to exploit smaller businesses, our communities, and our
hardest working neighbors. Finally, when more Californians earn a fair
wage for their work, our entire economy does better. Working people are
better able to afford their rent, provide three meals per day for their
kids, and all of that spending boosts the economies of our local
communities.”

Opponents

Opponents to Prop 32 include the California Restaurant Association, the
California Chamber of Commerce, and the California Grocers Association.
They argue that “Prop. 32 forces small businesses to increase prices,
adding to inflation and raising the cost of living in California even
more. That hurts working families!” Prop. 32 raises costs for state and
local governments by billions, meaning they’ll cut vital services and
raise taxes.

“Prop. 32 costs jobs, with the greatest impact on teens and people of
color who are trying to get a career started with entry level jobs.
That’s why leaders across California who previously supported minimum
wage increases have changed course and asked for them to be slowed
down.”

Financial support

At the end of July, Kevin De Leon, Los Angeles City Council member, gave
$555,000 to the “Yes Committee on Propositions 3, 32, and 33.” Prior to
that the Committee had received no contributions.

“Californians against job losses and higher prices, No on Proposition
32,” reported no fund raising in the first half of 2024. Since August 1,
they have received $65,000 in donations. The California Grocers
Association gave $15,000.