California’s statewide Proposition 32 ballot measure would increase the minimum wage to $18 per hour for all businesses by 2026. The current minimum wage is $16, and is set to increase to $16.50 in January 2025 if Proposition 32 is not approved. Current state law requires a minimum wage increase based on inflation each year. However, Proposition 32, if approved, would increase the minimum wage to $17 immediately, and $18 on Jan. 1, 2025, for businesses with 26 or more employees. For businesses with 25 or fewer employees, Proposition 32 would require them to pay employees $17 per hour on Jan. 1, 2025, and $18 per hour on Jan. 1, 2026.

The proposition follows a similar minimum wage increase earlier this year for fast food workers. As of April 1, all national fast food chain employers in California are required to pay employees at least $20 per hour.

Municipalities in California may also set their own minimum wage through local ordinances, which often exceed the state’s minimum. The city of West Hollywood currently has the highest minimum wage in the state at $19.08 per hour, which is set to increase to $19.65 on Jan. 1, 2025.

The proposition is supported by the California Labor Federation, Unite Here Local 11, the ACLU of Southern California and the California Democratic Party. The primary organizer behind Proposition 32 is Joe Sanberg, an entrepreneur and anti-poverty activist who spent $10 million to get the measure on the ballot.

Proponents believe a minimum wage increase is long overdue, since the current minimum wage laws requiring an annual increase were signed in 2016. Advocates cite the high cost of living in California, which has increased since the pandemic.

“Every Californian who works at least a full-time, 40-hour work week should be able to afford life’s basic needs. However, there are about two million Californians who are working full time, and more, but earn less than $18 per hour. Most of these Californians who earn less than $18 per hour are heads of their households. Most of these Californians who earn less than $18 per hour have kids,” Sanberg said. “We can all agree that Californians who work hard, working full time or more, should not live in poverty. But that’s exactly how millions of Californians are living because their wages are too low to afford how expensive life has become in California.”

The proposition is opposed by the California Chamber of Commerce, the California Grocers Association and the California Restaurant Association, and the California Republican Party.

Opponents argue that Proposition 32 will force businesses to raise prices, exacerbating inflation and potentially driving job losses. They also believe that the one-size-fits-all approach to the minimum wage does not account for varying economies throughout the state.

“Just like everybody else in California, our small businesses are employers. They’re struggling with high costs right now, and this increase will only add to those costs and create pressures with regards to their budget,” California Chamber of Commerce CEO Jennifer Barrera said.