Proposition 32

Over the past decade, California has undergone a significant shiD in wage policy, doubling its minimum wage from $8 per hour in 2013 to $16 per hour in 2024, with future increases now indexed to inflaMon. This unprecedented pace in wage increases contrasts sharply with the historical trend, where the real minimum wage grew only modestly. Additionally, many local jurisdictions have raised wage floors even further, with cities like West Hollywood, San Francisco, and San Jose leading the way. Industry carveouts, such as the $20 per hour minimum for franchise fast-food workers and $18 to $23 for healthcare employees, ripple through the economy, pushing up labor costs across various sectors.

As wages rise, advocates point to enhanced standards of living, but Beacon Economics’ analysis reveals a grimmer outcome.

LIMITED ARTICLE ACCESS

“Proposition 32 on this year’s ballot would raise California’s minimum wage to $18 per hour, but it would also raise the cost of living. Proponents often claim that previous wage hikes had little impact—usually by focusing on narrow aspects of the issue. This perspective loses the forest for the trees. While the effects of minimum wage hikes might seem small in isolation, they add up across the economy, and the broader impact is clear: lower-income households are disproportionately harmed.”

“In Riverside, minimum wage hikes since 2013 have raised the cost of living by over 2%, and the proposed $18 wage would add another 0.6%, the equivalent of an additional $400 per year, meaning a typical household will pay about $1,900 more annually than they did a decade ago. In San Francisco, where the relative minimum wage is lower due to higher median wages, the impact would be smaller, with households paying around $800 more per year if the measure passes. While Prop 32 aims to reduce income inequality, it will likely raise the cost of living in the state’s lowest-income areas.”

“As many voters remain anxious about inflation, support for a California ballot measure that would gradually raise the minimum wage statewide appears to be waning, according to new survey data.”

“Voters are smart and inflation fatigued,” Jot Condie, president and CEO of the California Restaurant Association, said in a statement. “The recent poll showing a majority of voters would vote no on Prop. 32 is encouraging given the devastating impacts it will have on family budgets and on small businesses.”

LIMITED ARTICLE ACCESS

“For the past decade, California has embarked on a grand experiment to turn the minimum wage into a “living wage.” It’s a laudable goal, but also one that has failed to have its desired impact. Now, pointing to the state’s affordability issues, proponents of Proposition 32 would have you believe raising the minimum wage from $16 to $18 per hour offers a solution for entry-level workers who struggle to keep up with California’s soaring rents.”

“Yet, proponents of Prop. 32 have nothing to say about the elephant in the room: Housing costs are a pain point in California because our housing is too expensive to build, and its supply is woefully insufficient to meet demand. In this way, Prop. 32 is just another attempt to paper over glaring structural and policy-related failures.”

“Californians are paying more for everything these days… small business owners, we are feeling the pinch, too.”

“I have worked hard to keep my family’s legacy alive and well after my dad, an Italian immigrant, opened Relles Florist in 1946 after serving our country in World War II. It hasn’t been easy. We continue to struggle with the rising costs to stay in business.”

“Proposition 32, a proposed minimum wage hike on the November ballot, will only increase costs for working families, small businesses, and even state and local governments.”

LIMITED ARTICLE ACCESS

“There’s no question California is an extremely expensive state. Santa Cruz County is one of the most expensive places in the entire country to live. Raising the minimum wage would likely increase prices that will affect lower-income workers in particular, although the nonpartisan state legislative analyst pegs the increases at less than 0.5%.”

“But raising costs to businesses by force is not the way to help people get by. This raise would still be far below the needed income for most workers to afford Santa Cruz County’s outrageously high rents, for example. And as wages go up, so do prices and the cycle just continues to escalate.”

LIMITED ARTICLE ACCESS

“I know San Diegans are feeling what we’re feeling. Our utility bills continue to shock us, grocery store trips are more expensive, rent is eating up more of our budget, gas is going up, and it’s making folks spend less and eat out less.

Proposition 32 will force businesses to increase their prices even more to offset the higher labor costs; that’s just the reality. If Proposition 32 passes, it will only end up hurting the working families it is intended to help…

Proposition 32 will only raise prices for all of us, hurt working families, and increase San Diego’s budget deficit at a time of economic uncertainty. We simply can’t afford it right now.”

“Ironically, one reason given for raising the minimum wage is to help poor workers make more. But they’re not helped if they’re laid off. And the poor in general are not helped by having to pay even higher prices… As we have said in the past on this issue and about this very proposal, if the goal is to help low-wage workers get by, the better focus is on reducing the cost of living in the now very-expensive Golden State.”

SUBSCRIPTION REQUIRED

“An analysis by the state Legislative Analyst’s Office estimates the measure would increase costs for many businesses, which in turn “likely would raise the prices they charge for the things they sell… It’s time to hit pause. Vote No on Proposition 32. Bring order to this chaos.”