California voters have rejected a ballot that would make the state's minimum wage $18 an hour, the highest in the country.
Proposition 32, included in the ballot measure during the 2024 election, would have immediately raised the minimum wage to $17 an hour for employees of businesses with 26 or more workers. By Jan. 1, 2025, it would have increased to $18 an hour for those workers. For smaller businesses with 25 or fewer employees, the wage hike would have been implemented more gradually, reaching $17 in 2025 and $18 by Jan. 1, 2026. (Related: J.D. Vance promises higher wages for middle-class and working-class Americans under a second Trump administration.)
The decision comes amid a backdrop of recent wage gains for sectors like health care and fast food, which saw minimum pay increases earlier this year. Over the last decade, California has steadily increased its minimum wage, doubling it from $8 in 2014 and $18 by Jan. 1, 2026.
However, California voters narrowly rejected the ballot measure.
According to the final results, announced two weeks after Election Day, only 49.2 percent of voters supported the wage increase, just shy of the majority needed for approval. The vote revealed a clear geographic divide, wherein Bay Area and coastal counties largely backed the measures, with exceptions, including San Luis Obispo, Orange, Ventura and Del Norte counties. Meanwhile, most inland counties opposed it, apart from Alpine and Imperial.
California Chamber of Commerce, one of the organizations that oppose the measure, has lauded the defeat.
"CalChamber opposed Prop. 32 because it would have resulted in higher costs for small business employers and consumers," CEO Jennifer Barrera said. "With the economy and costs top of mind for many voters this election, that message appears to have resonated."
Other opponents, including the California Grocers Association, Chamber of Commerce and Restaurants Association also argued that the ballot measure would only have an economic impact on businesses, particularly small employers. They warned that such a rapid wage increase could lead to job cuts, reduced hours and higher prices for consumers.
Failure to pass Proposition 32 is disappointing for Californians, proponents say
However, advocates like the California Democratic Party, California Labor Federation and California Teachers Association argued that the measure was necessary to address the rising costs of living in California, where nearly one-third of the workforce earns less than $18 an hour. These proponents also estimated that the ballot measure would have benefited two million workers, including hotel and grocery employees.
"Proposition 32's failure to pass is disappointing for all Californians who believe that everyone who works should earn enough to support their families," said Kathy Finn, the president of United Food and Commercial Workers International Union (UFCW) 770, a Southern California union representing about 30,000 workers in different sectors.
Contrary to the argument of the opposition, entrepreneur Joe Sandberg, who had raised about $10.4 million in support of Proposition 32 before the election, argued that a minimum wage increase would "create more jobs and more prosperity for everyone."
"When more Californians earn a fair wage for their work, our entire economy does better," Sandberg wrote. "Working people are better able to afford their rent, provide three meals per day for their kids, and all of that spending boosts the economies of our local communities."
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