California to Raise Minimum Wage to $16.90 by 2026

News Summary

California will increase its minimum wage to $16.90 per hour effective January 1, 2026, following an inflation-adjusted process. This move will establish California as having the second-highest minimum wage in the U.S. Additionally, healthcare workers will see their wages rise to $24 per hour in 2025, and fast food workers will earn $20 per hour from April 2024. The adjustment reflects ongoing efforts to support workers amidst rising living costs.

California will implement an increase in its minimum wage to $16.90 per hour effective January 1, 2026. This marks a rise from the current rate of $16.50 and will position California as having the second-highest minimum wage in the United States, following Washington D.C.’s $17.95 per hour.

The announcement was made through a letter from Joe Stephenshaw, Director of the California Department of Finance, sent to Governor Gavin Newsom and state legislative leaders. It is part of an ongoing annual adjustment process that commenced after California’s minimum wage was raised in 2023.

As stipulated by state law, the annual wage adjustment is determined based on inflation, reflecting economic conditions. Each year, the adjustment is calculated on August 1, and is capped at either 3.5% or the rate of change for the U.S. Consumer Price Index for urban wage earners and clerical workers (CPI-W), whichever is lower. For this year, the adjustment reflects a 2.49% increase, calculated from the CPI-W for the 12-month period ending June 30, 2025.

In addition to this statewide minimum wage adjustment, certain health care workers in California will see their minimum wage increase to $24 per hour starting in July 2025, while fast food workers currently have a minimum wage set at $20 per hour effective from April 2024. There were significant discussions surrounding the fast-food wage increase, with critics warning it could result in job losses and higher prices. However, studies from UC Berkeley indicated that these adverse outcomes did not materialize.

The recent minimum wage increase follows a statewide ballot proposition that aimed to raise the minimum wage to $18 per hour, which was rejected in the 2024 election. Approximately 50.7% of voters voted against the proposition.

Historically, California’s minimum wage has seen gradual increases, with rates set at $16.00 in 2024 and $15.50 in 2023. The state’s minimum wage adjustment calculation ensures that the rate will not decrease following any negative changes in the CPI, thereby protecting workers’ earnings.

The increase in the minimum wage is part of California’s broader policy initiative aimed at addressing inflation and enhancing the standard of living for workers amidst rising living costs. As the state continues to adapt its labor laws and policies, these adjustments reflect ongoing efforts to support the economic well-being of its residents.

Deeper Dive: News & Info About This Topic

• San Francisco Chronicle
• Wikipedia: Minimum Wage in California
• KCRA
• Google Search: California Minimum Wage Increase 2026
• ABC 10
• Google Scholar: California Minimum Wage Adjustment
• Bloomberg Law
• Encyclopedia Britannica: Minimum Wage