November 5, 2024 Ballot Prop. 32

Proposition 32: Raises Minimum Wage. Initiative Statute.

Living Wage Act of 2022

Summary

Proposition 32 is a citizen-initiated ballot measure that proposes to raise the California minimum wage over the next two years to $18 per hour depending on firm size.

California’s minimum wage is currently $16 per hour. In 2016 Senate Bill 3 was signed into law to increase the state's minimum wage to $15 an hour, and provided for annual increases to the minimum wage based on changes in the U.S. Consumer Price Index for Wage Earners and Clerical Workers (CPI-W), which is a measure of inflation.  For reference, see this table from the CA Department of Industrial Relations shows the history of the minimum wage in California from 1916 to current .

For those cities that do not have a local minimum wage increase already in place, this measure will require employers to increase the minimum wage as follows:

• Employers with 26 or more employees would pay $17 hourly for the remainder of 2024 and $18 hourly beginning on January 1, 2025. 

• Employers with 25 or fewer employees would pay $17 hourly beginning January 1, 2025, and $18 hourly beginning January 1, 2026. 

• Thereafter, as existing law provides, the minimum wage annually adjusts for inflation. 

• In addition to the generally applicable minimum wage described above, current laws establish a higher minimum wage in specific industries. This measure does not amend those laws. 

There are approximately 40 California cities that have local minimum wages that are higher than the state’s minimum wage, including six that already require at least $18 and several already are just a small inflationary adjustment away from it. (For more information please refer to the UC Berkeley Labor Center, Inventory of US City and County Minimum Wage Ordinances.)

There are state laws that set higher minimum wages for employers in certain industries. For example, most fast food restaurants must pay their workers at least $20 per hour. Wages for certain healthcare workers will be raised starting in 2025.

Fiscal Impact

Proposition 32 could have a wide range of fiscal effects depending on the economy. According to the CA Legislative Analyst's Office (LAO) the estimated total costs would likely be less than 1 billion dollars.  Based on LAO analysis, wages, prices, profits, and jobs could be impacted in the following ways:

• Higher Wages. Workers who would have made less than $18 per hour would instead make $18 or more per hour by 2026. Higher minimum wages also tend to push up wages for other workers. This means that many workers making a bit more than $18 per hour also likely would get a raise. 

• Likely Higher Prices. Higher wages would increase costs for many businesses. Some businesses likely would charge customers higher prices. The overall price increase from Proposition 32 likely would be smaller than one-half of 1 percent. 

• Likely Lower Profits. The costs of higher wages likely would reduce some businesses’ profits. 

• Effect on Jobs. The number of jobs in the state could go up or down. This change likely would be smaller than one-quarter of 1 percent. Government Costs Could Go Up or Down. Proposition 32 would increase state and local government costs in some ways but would decrease them in other ways: 

• Higher Government Costs to Pay for Workers. The state and many local governments would have higher costs to pay their employees. They also would have higher costs to pay for work done by workers who are not their employees. 

• Savings From Lower Enrollment in Health and Human Services Programs. Proposition 32 would change the number of people enrolled in health and human services programs (such as California’s Medicaid program, Medi-Cal) because it would change people’s incomes. These enrollment changes likely would reduce state and local government costs. 

• Lower Revenues. Proposition 32 would affect income tax and sales tax revenues because it would change incomes and prices. Overall, the proposition likely would reduce state and local government revenues. Revenues would be lower mainly due to lower incomes for business owners. The net revenue loss likely would not exceed a few hundred million dollars annually. Last year, total state and local revenue from these taxes was about $200 billion.

What your vote means

A YES vote on this measure means: The state minimum wage would be $18 per hour in 2026. After that, it would go up each year based on inflation or how fast prices are going up.

A NO vote on this measure means: The state minimum wage structure would stay at $16 per hour, likely would be about $17 per hour in 2026. After that, it would go up each year based on inflation or how fast prices are going up.

Non-partisan Voter Information

Ballotpedia

CalMatters

CalMatters, Explicación de la Proposición 32 en las elecciones de California de 2024 (video)

News Coverage of Proposition

LAist

Los Angeles Times

Los Angeles Daily News

Sacramento Bee Capital Alert

Public Opinion Polls

• Public Policy Institute of California Statewide Survey, Sept. 2024
• Berkeley IGS Poll, August 2024, Q. 17A
• California Elections and Policy Poll (CEPP) - January 2024 (conducted by University of Southern California Dornsife/Price, Center for Urban Politics and Policy, CSU Long Beach, and Cal Poly Pomona)

Pro/Con Statements