California raises minimum wage to $17.40 as governor takes aim at Trump
California Governor Gavin Newsom announced the state's minimum wage will increase to $17.40 next year, the highest in the US. The move, effective January 1, comes with criticism of the federal minimum wage and the Trump administration.
California's new minimum wage
California Governor Gavin Newsom announced on Friday that the state's minimum wage will rise to $17.40 per hour starting January 1. This will make California's rate the highest among all US states, surpassing its current level of $16.90.
Newsom presented the increase as a measure to help working families cope with high living costs. He also directed criticism at the White House, saying that Donald Trump and Republicans had long blocked efforts to raise the federal minimum wage while granting tax breaks to billionaires and large corporations.
Federal wage stuck at $7.25
The federal minimum wage has remained at $7.25 per hour since a raise during George W. Bush's presidency from $6.55 to $7.25. Opponents of a federal increase argue it could harm the labor market, including causing job losses.
Newsom contrasted California's approach with the federal level, stating that his state rewards work and prioritizes working families. He argued that while some believe $7.25 an hour is sufficient, California disagrees.
Other states and comparison
According to the US Department of Labor, 30 states plus Washington DC have set minimum wages above the federal floor. Washington state is set to follow closely behind California, with a minimum wage of $17.13 in 2027. In New York City and three nearby counties, the rate already stands at $17.
Since Newsom took office in 2019, California's minimum wage has grown from $12 to the upcoming $17.40.
Cost of living reality
Despite the increase, MIT researchers estimate that a California family with two working adults and two children would need each adult to earn $36.38 per hour to cover basic expenses such as food, childcare, healthcare, housing, and transportation.
Cost-of-living concerns are a major issue ahead of the midterm elections. The Trump administration has faced criticism over the prolonged war with Iran, which has contributed to rising gas prices nationwide. In California, where a special reduced-emission gasoline is required, fuel prices have exceeded $6 per gallon in recent months.
