Entering the new year, California has announced a raise for the state’s minimum wage. As of Jan. 1, 2024, California’s minimum wage has increased from $15.50 per hour to $16.00 per hour.
Specifically, Gov. Gavin Newsom has approved raising the minimum wage for in-state fast food workers to $20 an hour, starting in April, and in-state healthcare workers to $25 an hour, starting in June. Besides Washington state and the District of Columbia, California has now taken the lead as the state offering its employers with the highest minimum wage in the nation.
This latest increase was a response to the current inflation rate of 3.4%, “which is the rising price level of all goods” Alan Morris, an economics teacher at San Domenico Upper School, said.
“The amount that people get paid is called nominal wage. When inflation happens and your wage stays the same, the purchasing power of your wage is decreasing. So, if your wage does not keep up with inflation, your real wage is actually decreasing,” Morris said.
Crystal Jimenez, a resident faculty at San Domenico, provided an example that further explains this concept and the impact of inflation on San Domenico, a boarding school in California.
“We spend more than $300 every two weeks on groceries,” Jimenez said. “This number used to be $220 just a year ago.”
The projected 50 cent increase is expected to affect approximately one million workers either positively or negatively. Supporters argue that raising the minimum wage would help people afford their basic expenses, while opponents pose that it may result in reduced hiring, which eventually leads to more unemployment.
Recently, there was evidence disproving a direct link between a state’s minimum wage and a state’s unemployment rate. West Virginia, Texas, and Kentucky that had a $7.25 minimum wage, had higher unemployment rates than Washington that had a $15.74 minimum wage. However, the debate over whether or not to make minimum wage adjustments still continues.
No matter what perspective people have, one clear motivation behind California’s decision to raise the minimum wage is society’s commitment to make sure that struggling individuals are supported.
