After weeks of vote counting across the Golden State, the Associated Press finally called the race for Proposition 32 – which would raise the state’s minimum wage from $16 to $18 an hour. The measure was rejected by a 50.8% to 49.2% vote as of November 22.
This is the first time California voters have ever rejected a minimum wage hike proposed at the ballot box.
So what made this measure unique?
California has been a litmus test for unprecedented wage hikes and other mandates for years.
- Back in 2016, then-Governor Jerry Brown signed legislation to set California on a path to reach a $15 minimum wage nationwide. This was the first state to adopt such legislation.
- Since then, California cities have raised their rates beyond that state requirement, and have some of the leading wage rates in the nation, nearly $20 per hour.
- California has also seen a wave of recent local and state measures attempting to raise industry minimum wages, including healthcare, hospitality, and fast food restaurants – some proposing as much as $25 an hour.
This year, California residents, employees, and businesses got a taste of how harmful these mandates can be.
- AB 1228, which raised the state’s fast food industry minimum wage up to $20 per hour starting April 1, 2024, has caused layoffs, price hikes, and restaurant closures just months after its implementation. An EPI survey conducted earlier this year found these impacts will continue under the law as restaurants try to stay in operation – especially since advocates are calling for another 3.5% increase next year.
- West Hollywood, home to one of the highest minimum wages in the nation this year, saw devastating staffing cuts and business closures. A city-commissioned study found 22% of hourly workers lost their jobs, and another 17% saw their scheduled hours drop. Business owners called on the city council for relief, and the Council voted to delay a near-50 cent increase planned for this past July as a result.
Economists and voters alike believe moving the goalposts on minimum wages causes more harm.
When asked about a proposed $18 minimum wage in California, three-fourths of economists surveyed by EPI said such a policy would cost the state jobs.
Now voters too are pushing back – following months of Governor Gavin Newsom and other proponents calling wage hikes in the state “gradual” and the negative consequences “modest.”
California-based chef Andrew Gruel told Fox Business:
“It shows that Californians recognize the propaganda they’ve been told, especially with the FAST Act, which was increasing the minimum wage for fast food workers, immediately prices increased. So that’s why this became a universal issue.”