Confounding pundits and pollsters alike, Californians voted against increasing the minimum wage in November.
Buried in the headlines of the 2024 presidential election, the shocking failure of a minimum wage hike in a blue state may epitomize the type of policymaking that Americans are choosing to reject.
It likewise serves as a cautionary tale for swing state conservatives as they deliver for their new working-class base.
The California story started last year, when legislation passed to raise the minimum wage for just two types of workers: those in “fast food” to $20 per hour and those in health care to $25 per hour.
For the rest of California’s workers, legislators chose to let voters decide.
The decision was presented in the form of a ballot question, known as a proposition.
Proposition 32 created two more tiers of the minimum wage based on an employer’s number of workers.
The proposition’s options were to vote yes or no.
In voting yes, employers with more than 26 employees would see the minimum wage set at $18, which is $1.50 more than the current California minimum wage, while employers under the threshold would require a 50 cent raise to $17.
In voting no, the minimum wage would automatically rise to $17 as the current California law indexes the minimum wage to inflation.
Ostensibly, Californians were asked to decide if larger employers should have to pay workers a dollar more per hour than anticipated under the current law.
But in reality, the proposition would codify the decision of California’s legislators to create four different types of minimum wages, which is a policy inherently intended to be universal for all workers.
The byproduct of heedless wage hikes hit Californians months before Election Day.
Eight months prior to the election, the $20 “fast food” minimum wage created by legislators took effect.
Predictably, fast food employers slashed staff, cut hours and raised prices.
One franchisee explained that it resulted in the largest price hikes in their entire 25-year history.
However, those were not the only issues that drew attention.
An exception adopted by legislators in the minimum wage law caused an outcry after it allegedly benefitted the close friend of California’s Gov. Gavin Newsom.
A loophole was created for restaurants that sell whole loaves of bread, reportedly at the request of a Panera-owning donor, exempting his businesses from the wage hike.
When attempting to learn who inserted the provisions into the new minimum wage law, the public was stonewalled by an apparent confidentiality agreement signed by the groups negotiating the bill.
After considerable backlash, Panera agreed to abide by the law’s intent but the exception remains in place to this day.
On the proposition, coastal, more liberal Californians voted yes, while inland, more conservative Californians voted no.
By a 1.4-point margin, the bluest of blue states rejected the minimum wage hike for California’s remaining workers.
Those potentially most deserving of a raise, the remainder of California’s workers, got left behind in the aftermath.
The remarkable failure of Proposition 32 may be instructive to other states’ efforts to raise the minimum wage.
In the pivotal swing state of Pennsylvania, where Republicans saw massive electoral gains, the statutory minimum wage is $7.25 an hour while the practical minimum wage more than doubles it.
Considering California’s attempt laden with corruption, division and indifference toward consumers’ budgets, Pennsylvanians should expect a safer experience in a divided legislature.
In the last legislative session, Pennsylvania House Democrats passed a $15 per hour minimum wage while Pennsylvania Senate Democrats proposed a $20 per hour minimum wage.
Pennsylvania Republicans may have the path forward. State Sen. Dan Laughlin championed a proposal to raise the minimum wage to $15 over three years, then tie future increases to inflation. The wage hike applies to all workers.
President-elect Trump voiced support for raising the minimum wage, with the proviso that increases should be state-driven to ensure it matches local economic factors.
Trump’s reelection firmly established the GOP as the worker’s party while blue state Californians, who rejected Trump by a 20-point margin, ironically abandoned a minimum wage hike for all workers.
Short of a fundamental political realignment like the one that just occurred, Republicans are unlikely to shift away from working class interests for a generation or more.
Savvy state Republican legislators will deliver for their new political base with an agenda that includes right-sizing the minimum wage and potentially go further by removing taxes from tips and overtime.
Athan Koutsiouroumbas is a managing director at Long Nyquist and Associates and a former congressional chief of staff.
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