The California Chamber of Commerce Board of Directors has taken an oppose position on Proposition 32, a November ballot measure that would increase California’s minimum wage to $18 an hour for thousands of the state’s employers.
“If Proposition 32 is passed, Californians will see higher costs, fewer jobs and a reduction of available work hours for employees in the state,” said CalChamber President and CEO Jennifer Barrera. “Voters need to reject this proposal because it will contribute to inflation, add to the high cost of living in California, and hurt state revenues. It will put even more pressure on our state budget.”
CalChamber and other opponents argue that passage of Proposition 32 will leave fewer resources available to fund important programs, including those that enhance public safety and education, and work to combat California’s homelessness crisis.
Further, smaller employers, who often are least able to absorb increased costs, will experience a disproportionate impact if the measure passes. “Smaller companies that are crucial to the success of local communities and our economy will be hit hard if Proposition 32 becomes law,” said Barrera. “Businesses will be saddled with a sustained rise in workforce costs that may be unsustainable.”
Proposition 32 hurts workers because it will result in a reduction of jobs and reduced working hours for California employees, disproportionately impacting those with limited training or who are new to the workforce.
Importantly to employers, the measure will lead to an increase in payroll expenses because they will be forced to increase wages for many exempt workers. Under California law, to qualify as “exempt,” an employee must make at least twice the minimum wage. Currently, that minimum annual salary with a $16 an hour minimum wage is $66,560. Under an $18 an hour minimum wage, that minimum salary would be $74,880.
Proposition 32 Provisions
Proposition 32 increases the minimum wage for employers with more than 25 employees from the current $16 an hour to a $17 hourly wage for 2024 and $18 hourly wage in 2025. For employers with 25 or fewer employees, the minimum wage would increase to $17 an hour in 2025 and $18 an hour in 2026. Minimum wages would thereafter be increased annually by an inflation adjustment—the equivalent of the consumer price index (CPI), but no greater than 3.5% a year.
