How California's Minimum Wage Compares to Other States

With the introduction of a $20 baseline hourly wage specifically for fast-food workers on Monday, California has cemented itself as having among the highest minimum wages.

As of April 1, people working for franchises with 60 or more locations nationwide will be automatically eligible for the new rate, up from the $16 statewide minimum instituted in January. This means workers in outlets that don't count as restaurants or bakeries will see their pay packets increase by as much as 25 percent overnight.

The fast food-specific minimum wage is the first of its kind at a state level in the U.S. so far. John Logan, a professor of Labor Studies at San Francisco State University, previously told news station KGO that how California had implemented it "may act as a model for other states."

Workers in California outside of the fast-food industry already benefit from nearly the highest minimum wage in the country, second only to the $16.28 minimum in Washington state and $17 in Washington, D.C.

California's minimum wage has been steadily increasing from $10 in 2017, and last increased from $15.50 in January.

However, many cities and counties have set their own minimum wages above the statewide baseline to account for a locally higher cost of living, meaning in many places the fast-food worker minimum wage hike will be less substantial.

According to figures maintained by the University of California, Berkeley, the minimum wage in West Hollywood is already $19.08, while in San Francisco it is $18.07.

While proponents of the new minimum wage—the product of a compromise between unions and industry figures, according to the Associated Press—argue it will improve the economic situation of some of California's lowest-paid workers, business owners have warned that the pay hikes could have a knock-on impact on menu prices at a time when the cost of living remains a concern for many.

Even though Pizza Hut announced in December that it was laying off its in-house delivery drivers ahead of the minimum wage rise, experts have suggested that major wage hikes tended not to lead to greater unemployment, but could see decreases in employees' working hours.

A 2021 study into a $15 minimum wage enacted in Seattle, Washington, in 2014 found that while low-paid workers' wages rose by 3.4 percent, their working hours decreased by seven percent. However, it noted that overall, workers' wages rose by more than they lost through working hours falling.

Aside from the $16 or more in California and Washington, several states in the northeast—Connecticut, Maryland, Massachusetts, New Jersey and New York—where the cost of living is also high, have adopted minimum wages of $15 or more.

States such as Arizona, Colorado, Hawaii, Illinois, Maine, Oregon and Rhode Island have instituted minimum wages of $14 or more.

Several states have adopted the same minimum wage as the federal rate of $7.25 an hour, while others have no minimum rate—such as Alabama, Louisiana and Mississippi—or a minimum wage below the federal amount—Georgia and Wyoming—in which case the federal minimum applies.

In some states, different minimum wages are in place depending on the size of the employer. For instance, in Ohio, companies with revenue in excess of $385,000 a year must pay $10.45 an hour, while those with smaller takings must offer the federal rate.