California Minimum Wage Increase - Clarification

The Fair Labor Standards Act created the federal minimum in 1938.

Governor Newsom announces California will raise statewide minimum wage | Governor of California

The minimum wage will increase to $17.40 per hour beginning January 1, 2027

• Higher than any current statewide minimum wage in the nation
• Nearly two-and-a-half times the federal minimum wage
• The increase is automatic under California law, which adjusts the minimum wage annually to keep pace with inflation.
• The federal minimum wage has been $7.25 an hour since 2009
  • More than 17 years
  • The longest the federal minimum wage has gone without an increase since it was adopted in 1938.
  • During those 17 years inflation has dramatically raised the cost of living for working families.

“For years, Donald Trump and Republicans have blocked efforts to raise the federal minimum wage while handing tax breaks to billionaires and big corporations. 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.” Governor Gavin Newsom

Governor Newsom used the minimum-wage announcement as a platform to itemize what he has signed as legislation as governor:

Taxpayer funded programs related to services for families and children

• Become the first state in the nation to provide free breakfast and lunch to every public-school student.
• Made preschool free for all four-year-olds via universal transitional kindergarten.
• Expanded access to free and low-cost child care for nearly 500,000 children.
• Invested record funding in free summer school and before and after-school programs
• Launched the nation’s first Golden State Start program, providing 400 free diapers to every newborn before leaving the hospital.
• Expanded Paid Family Leave, allowing lower-income workers to receive up to 90% of their wages while caring for a new child or sick loved one.
• Launched CalKIDS, the nation’s largest children’s “baby bonds” — college and career savings accounts, automatically providing eligible children with up to $1,500 for higher education or career training.

Taxpayer funded programs related to health care

• Created CalRx, bringing affordable generic drugs and $11 insulin to Californians.
• Expanded Medi-Cal to provide health coverage to more Californians than ever before.

Taxpayer funded programs related to housing

• Capped security deposits at one month’s rent, lowering move-in costs for renters.
• Banned hidden “junk fees” so Californians see the real price upfront.
• Delivering up to $60 billion in utility bill relief rebates.

Programs and legislation with costs which will be passed from businesses to consumers

• Capped security deposits at one month’s rent, lowering move-in costs for renters.
• Banned hidden “junk fees” so Californians see the real price upfront.
• Raised the minimum wage to $20 per hour for fast-food workers and $25 per hour for health care workers.
• Expanded the California Earned Income Tax Credit and delivered the largest state tax rebate in American history, putting billions back into the pockets of working families.

The impact of the Raise the Wage Act of 2025 | Economic Policy Institute

The federal minimum wage has been $7.25 an hour since 2009

• More than 17 years
• The longest the federal minimum wage has gone without an increase since it was adopted in 1938.

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