California Minimum Wage to Rise to $17.40, Highest in US

California governor Gavin Newsom announced that the state’s minimum wage will rise to $17.40 next year, a pay floor set to become the highest of any US state.

The pay bump will go into effect starting 1 January, Newsom announced on Friday. The state’s current minimum rate is $16.90. In a news release, Newsom touted the move as a salve for working families amid high living costs and took a jab at the Trump administration.

“For years, Donald Trump and Republicans have blocked efforts to raise the federal minimum wage while handing tax breaks to billionaires and big corporations,” Newsom said.

The federal minimum wage was last increased during George W Bush’s presidency, when it rose from $6.55 to $7.25. Opponents of a federal increase fear adverse effects to the labor market such as job losses.

“California has chosen a different path – one that rewards work, grows the economy and puts working families first. We believe if you work hard, you deserve a decent paycheck. They think $7.25 an hour is enough. We don’t,” Newsom said.

Thirty states in addition to Washington DC have set wage rates above the federal minimum. The state of Washington will trail close behind California in 2027 with a minimum wage of $17.13, according to data from the Department of Labor. In New York City and three nearby counties, the minimum wage is $17.

Since Newsom took the gubernatorial seat in 2019, the state’s minimum wage has grown from $12, according to his office.

Still, for a family of two working adults and two children in California, researchers at the Massachusetts Institute of Technology (MIT) estimate each adult must earn $36.38 to cover food, childcare, healthcare, housing and transportation, among other basic necessities.