Recent minimum wage increase doesn't keep up with high cost of living (opinion)

R.A. Heim
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Recently, Senate Bill (SB) 3 raised the California minimum wage to $15.50 per hour, with this change made effective at the start of 2023. (source) The Economic Policy Institute estimates that 3.2 million workers in California, almost a fifth of the state’s workforce, will see an increase in their wages, making up over a third of all workers nationally who will be affected by hikes in the minimum wage this year.

Exceptions to these changes

There are some exemptions to the minimum wage. For example, these individuals are not required to be paid at least $15.50 per hour: outside salespersons, individuals who are the parent, spouse, or child of the employer, and apprentices regularly indentured under the State Division of Apprenticeship Standards. (source)

But is $15.50 per hour enough for individuals?

According to 2020 data from the Bureau of Economic Analysis , the annual average cost of living in California is $46,636. Based on that number, it would cost $3,886 per month to live in California. If you were to work full-time at $15.50, you would make $2,480 before taxes. That's over $1,400 less than the cost of living. The numbers simply don't add up for most individuals.

That's why the minimum wage should be even higher. Assuming $4,000 per month to live in the state, the real minimum wage would be closer to $25 per hour when you factor in taxes and inflation. Until the minimum wage is at least $20 or more, it is not enough.

What do you think about the cost of living in California?

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