The Legislative Analyst’s Office study revealed that despite exceeding federal and many state standards, California’s minimum wage still falls short of easing the state’s high cost of living.
As of now, California’s minimum wage stands at $16 per hour, significantly higher than the federal minimum wage of $7.25, which has remained unchanged since 2009.
Minimum Wage vs ‘Poverty Wage
However, the report emphasizes that while the statewide minimum wage exceeds a ‘poverty wage’ in a basic sense, the soaring housing costs in the state make it exceptionally difficult for many low-wage workers to make ends meet.
The analysis reveals that major metropolitan areas and the Central Coast are unaffordable for minimum wage workers, irrespective of their household composition or whether they have children.
In nearly all counties, except Modoc, a single minimum-wage worker with three children can anticipate housing costs exceeding half of their gross income. In 20 counties, including heavily populated ones, such households face housing costs surpassing 100% of their gross income.
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California’s Ongoing Housing Affordability Struggles
Despite some positive findings for double-income households with no children in rural and mid-sized metro areas, challenges persist. Coastal counties present difficulties for households with two minimum wage workers and one child, as housing costs can exceed half of their gross income.
The report underscores that without substantial changes in policies or market conditions addressing California’s chronic housing undersupply, an increase in the minimum wage alone may not render housing more affordable in these areas.
Wage inequality is another key focus of the report, revealing that approximately six in 10 low-wage workers identify as Latino, with almost half being immigrants. The wage gap between white and Latino low-wage workers is estimated to be around 20%.
The paper suggests that state politicians take a more proactive approach to addressing these issues, proposing strategies like varying minimum wages across different regions or supporting local governments in harmonizing their minimum wage laws. You can read the entire report by clicking this link.
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