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California Minimum Wage to Increase to $17.40 an Hour in 2027, Newsom Announces
The inflation-tied increase will keep California’s wage floor ahead of Washington and more than double the federal minimum, officials said.
On Friday, Governor Gavin Newsom announced California's statewide minimum wage will rise to $17.40 per hour starting January 1, 2027, establishing the highest baseline wage in the nation.
The increase occurs automatically under state law, which adjusts base pay annually to match inflation, building upon the current $16.90 hourly rate and continuing a climb from the $12 rate in place when Newsom took office.
California's new baseline is nearly two-and-a-half times the federal minimum wage of $7.25, which has remained unchanged since 2009, while state officials noted a 3.7% annualized real GDP growth rate in early 2026.
Criticizing federal inaction, Newsom contrasted state policies with Republicans for blocking wage increases, following California's 2024 implementation of a separate $20-an-hour minimum wage for fast-food workers at major chains.
Business groups warn that rising labor costs may lead to higher consumer prices or reduced hiring, while other states including Alaska and Rhode Island are also implementing wage increases effective in 2027.