California voters officially rejected a ballot measure that would’ve increased the statewide minimum wage to $18 per hour. It’s the first time in the state’s history that a minimum wage increase has been turned down. Politico reported it was the first time in nearly three decades that any state had done it.
The plan, Proposition 32, failed 50.8 percent to 49.2 percent. Voters favored keeping the existing law, which set the minimum wage at $16 per hour in January. The other option was to raise the state minimum wage to $18 per hour; this change would’ve occurred in January 2025 for employers with 26 or more workers. For those with 25 or fewer workers, the shift would’ve happened in January 2026.
The rejection comes only months after California passed a law that increased minimum wage to $20 per hour for fast-food workers. Further raises will be determined by a statewide Fast Food Council. The state also passed a law that will eventually push the healthcare sector to a $25 per hour minimum wage.
The California Restaurant Association, California Chamber of Commerce, California Grocers Association, California Retailers Association, Western Growers, and the National Federation of Independent Businesses joined forces to campaign against the minimum wage increase. The groups claimed the measure would lead to higher prices, hurt small businesses, and increase costs to state and local governments running on budget deficits.
The Employment Policies Institute surveyed nearly 200 restaurant operators after the fast-food wage law was implemented in April, and found 98 percent had raised prices, 89 percent reduced employee hours, and 70 percent cut staff or consolidated positions.
“Californians are sending Gavin Newsom and the SEIU a clear message: They’re sick of being lab rats for their pet projects,” Rebekah Paxton, research director at the Employment Policies Institute, said in a statement. “Voters saw the devastating economic fallout of the $20 fast food minimum wage law, and for the first time in state history, voted against a statewide minimum wage hike.”
Labor unions and workers’ rights groups estimated the minimum wage increase would’ve benefitted 2 million workers, according to the AP. Kathy Finn, president of Southern California union UFCW 770, told the media outlet that “Proposition 32’s failure to pass is disappointing for all Californians who believe that everyone who works should earn enough to support their families.”
