California’s automatic minimum wage hikes hurt ‘affordability’

California’s minimum wage is rising to $17.40 per hour, starting next January 1. It’s an automatic increase, though Gavin Newsom is trying to take credit for it — which tells you the current state of politics in the Democratic Party.

The California minimum wage is already the highest in the nation. That’s thanks to Newsom’s predecessor, Jerry Brown, who signed SB 3 in 2016, his last year in office, to raise the minimum wage to $15, rising thereafter to keep up with inflation.

Democrats often campaign on raising the minimum wage. It’s the simplest form of economic redistribution. 

But very few workers actually earn the minimum wage. Those who do are often teenagers in part-time jobs — and the higher the wage goes, the more employers have an incentive to cut hours or move to automation.

California’s minimum wage is rising to $17.40 per hour, starting next January 1. It’s an automatic increase, though Gavin Newsom is trying to take credit for it — which tells you the current state of politics in the Democratic Party. Getty Images

That, in turn, prevents many young people — especially minorities — from entering the labor force and gaining crucial experience in entry-level jobs.

The restaurant industry in particular suffers when minimum wages rise.

Many restaurants already pay higher than the minimum wage. But raising the minimum wage increases the cost of their inputs — from the bread they use to the drinks they serve. That forces them to raise prices and to risk alienating customers.

The state already has a special, targeted $20-per-hour fast-food minimum wage. It has put many franchisees out of business.

It’s no longer unusual to place your hamburger order with a screen, rather than a human being.

California voters are smarter than the governor and his party on this issue. In fact, as recently as 2024, California voters rejected Proposition 32, which would have raised the minimum wage to $18 per hour by 2026.

That, in turn, prevents many young people — especially minorities — from entering the labor force and gaining crucial experience in entry-level jobs. Getty Images

But socialism is all the rage in the Democratic Party, and so it’s good politics for Newsom to emphasize even an automatic minimum wage increase.

It wasn’t long ago — just a few months, in fact — that “affordability” was the buzzword in politics.

Raising the minimum wage might help workers take home more pay — if they keep their jobs and their hours. 

But — ironically — it also feeds inflation. So everything becomes more expensive anyway.

California ranks dead last among all 50 states in affordability, and the automatic minimum wage increase is part of the reason.

At some point, California needs to get real about the reasons the cost of living keeps rising, and stop using gimmicks that just make the problem worse.