Bad news for workers in California: $18 an hour hike rejected, find out how it may affect you

Between 2019 and 2024, real wages fell in California by around three percent. As inflation eroded purchasing power, workers suffered as their paychecks allowed them to buy less and less. Over the same period, unemployment has risen from four percent to 5.4 percent. The unemployment rate shot up during the pandemic, and though it eventually reached the low pre-pandemic levels in mid-2022, it began to rise.

Voters veto wage increases for the state’s lowest-paid workers

Labor force participation in the Golden State stands within half a percent of what it did in 2019, the major shift being the percentage without work. Additionally challenging for California’s lowest-paid workers is the public’s failure to approve a ballot measure that would have bumped up the state’s minimum wage to $18 an hour by the end of the year for workers at larger companies; those employed at smaller companies would see the increases reflected in their pay starting in 2026. The vote was close, but those who voted “No” outnumbered those who voted in favor by 0.08 percent. Instead, the state will continue to adjust the minimum wage upward based on increases in the Consumer Price Index. In addition to the vetoing of this ballot measure, voters in California also failed to make slavery illegal, exposing the state’s incarcerated population to the immoral practice.

Breaking down real wage increases for those in the hospitality industry

While the average hourly rate of workers in the state is around $40, those working in leisure and hospitality earn an average of $26 an hour. Wages for workers in this industry have increased by 32 percent since 2019, which is above the 22 percent increase in consumer prices, meaning that the average worker in this sector has seen a 10 percent increase in their real wages over the last five years. Such increases are expected as they saw massive layoffs during the pandemic, and companies had to entice workers back into the labor market by offering higher wages. In October 2019, the average worker in the precarious industry worked 25.7 hours a week for $20 an hour, adding up to an annual income of $26,700. In October 2024, the average worker worked 25.2 hours—less than in 2019—for $26.49 an hour, for an annual income of $34,712. When you adjust for the loss in working time, the average increase in nominal wages drops to 29 percent; it also pushes the actual wage increase figure to 7 percent or around 1.4 percent annually.