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By Andrew Stanton
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California’s minimum wage will increase to $17.40 per hour on January 1, 2027 and will be one of the highest hourly rates in the nation, Democratic Governor Gavin Newsom announced Friday.
The federal minimum wage has remained at $7.25 per hour since 2009, when the final phase of the Fair Minimum Wage Act of 2007 took place. But many states have implemented minimum wage increases over the years, as many say the minimum wage is not sufficient for workers, particularly as inflation has surged in the aftermath of the COVID-19 pandemic.
California Minimum Wage Increase in 2027: What We Know
Announcing the wage increase, Newsom criticized Republicans who he said have “blocked efforts to raise the federal minimum wage while handing tax breaks to billionaires and big corporations.”
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“California has chosen a different path — one that rewards work, grows the economy, and puts working families first. We believe if you work hard, you deserve a decent paycheck. They think $7.25 an hour is enough. We don’t,” he wrote.
Currently, the minimum wage in California is $16.90 per hour, so the latest increase guarantees a 50-cent wage increase for those earning minimum wage in one of the highest cost-of-living states in the nation.
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How California Minimum Wage Will Compare to Other States
California already has one of the highest minimum wages in the country as of 2026, with only two states surpassing it. Washington’s minimum wage is $17.13 per hour, while Connecticut’s is $16.94 per hour, according to the National Conference of State Legislatures. Only Washington, D.C., would have a higher minimum wage of $18.40 per hour if no other states increase their wage higher by 2027.
Currently, about 30 states have minimum wages above the federal minimum of $7.25 per hour, but several states have not moved to increase that rate despite calls from those who believe it should have increased since 2009.
The minimum wage has not been raised federally since 2009, the longest gap in an increase since 1938. At the same time, inflation has increased. According to the Bureau of Labor Statistics’ CPI inflation calculator, $1 in January 2009 has the same buying power as $1.58 in June 2026.
The Economic Policy Institute (EPI) reported in 2022 that the value of the federal minimum wage was at its lowest point in more than 60 years. A worker paid the minimum wage would have earned 27.4 percent less in inflation-adjusted terms compared to July 2009, according to the report.
Could the Federal Minimum Wage Increase?
There have been efforts in Congress to address the federal minimum wage, but those attempts have stalled, lacking support from key lawmakers.
The Living Wage for All Act, introduced by Senator Chris Murphy of Connecticut and Representative Delia Ramirez of Illinois, both Democrats, calls for a federal minimum wage of $25 per hour.
Under the proposal, the rate would initially rise to $12 an hour. Large employers would be required to meet the $25 threshold by the 2031–2032 cycle, while smaller businesses would be given until the 2038–2039 cycle to comply.
Murphy said during a press conference that the minimum wage “should be a living wage.”
“This is the most powerful, the most affluent, the wealthiest country in the world,” he said. “There is no reason that somebody should go to work full time in this country and not be able to pay their bills. There is no excuse for it.”
Another bill, the Raise the Wage Act of 2021, would have raised the federal minimum wage to $15 per hour, but it did not pass Congress to become law.
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Which Other States Will Raise Minimum Wage in 2027?
Other states are also planning to raise their minimum wage. Michigan’s is set to increase to $15 per hour, while Rhode Island’s minimum wage is poised to reach $17 per hour. Alaska’s minimum wage will increase on July 1, 2027, according to the state’s Department of Labor.
Other states have automatic cost-of-living increases tied to regional inflation data that will result in their minimum wages increasing in 2027.
Those states include Arizona, Colorado, Connecticut, Maine, Minnesota, Montana, Nebraska, New Jersey, New York, Ohio, Oregon, South Dakota, Vermont and Washington.
Contact Newsweek editors on this story: Gabe Whisnant and Sam Wilson.
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