California bumps up its minimum wage

Millions of Californians got a raise this week, as the state minimum wage increased to $15.50 an hour.

Why it matters: Inflation is on the rise, and increasing the minimum wage can help to reduce economic inequality, according to the Economic Policy Institute.

• The Consumer Price Index, a measure of how much consumers pay for goods and services, has increased 7.1% over the past 12 months on the West Coast, according to the U.S. Bureau of Labor Statistics.

By the numbers: The minimum wage increase affects nearly 19% of California's workforce, about 3.2 million people.

• Those benefitting from the wage increase can expect an average $515 more in annual earnings.

Zoom in: San Francisco's minimum wage, as of July 2022, comes in even higher at $16.99 an hour.

• In 2014, San Francisco voters passed a measure to increase the minimum wage to $15 per hour by July 2018 and bump it up annually each year based on the annual CPI.
• In 2003, the city became the first local jurisdiction to implement a minimum wage higher than the federal or state minimum wage.

The big picture: There were wage increases in 22 other states and Washington, D.C., this year.

• The biggest factor driving the increases was inflation — 13 states tie their minimum wage rate to the Consumer Price Index, according to a new analysis. Other states had increases set by legislation or ballot initiatives.
• The federal wage floor, however, remains stuck at $7.25 an hour.

Be smart: These wage increases are part of a bigger trend in the workforce, where lower-income, lower-skilled workers are grabbing bigger wage increases than higher earners (in terms of percentage), Axios' Emily Peck reports.

• Wages for the lowest-skilled workers have risen more than for high-skill workers over the last 12 months, per the Atlanta Fed's wage tracker.
• Yes, but: Low-skilled workers stand to benefit more from these wage increases, as about 23% of those affected by minimum wage hikes have incomes below the poverty line, according to the EPI.

Meanwhile, California employers with more than 15 employees are now required to provide salary ranges in job listings amid the implementation of a new pay transparency law.

• Employers must also provide current employees with pay ranges for their position upon request.