California Minimum Wages Increase

Starting January 1, 2023, California minimum wages have increased yet again. Not only are the state’s base minimum wage rates increasing, individual cities, including San Diego are raising their minimum wages. We have everything you need to know about these changes and why they happen!

How Are California State Minimum Wages Increasing?

California, as a state, is raising its minimum wage from $15 to $15.50. This new increase is for all businesses within the state, yes all of them, no matter how many employees. This is the first time since 2018 that the wage did not increase by a full dollar value at the start of the new year.

How Do San Diego Minimum Wages Differ from California State Wage Increases?

If you live within San Diego City limits, not the county, starting January 1, 2023, the minimum wage will be raised from $15 to $16.30. This increase applies to “employees who perform at least two hours of work in one or more calendar weeks within the City of San Diego’s boundaries.” Employers must post these notices in a conspicuous place at any workplace or job site in the City of San Diego.

Why Do California Wages Increase?

In 2016, former Governor Jerry Brown signed a law that gradually increased the minimum wage by a pre-decided amount every year until it reached $15. Upon reaching the $ 15-an-hour wage, regular annual increases were set to continue on the first day of every year.  As announced by Governor Gavin Newson in May, a provision in the law allows wages of at least $15 to be raised annually up to 3.5% (rounded to the nearest 10 cents) for any increase in inflation of over 7% as measured by the national Consumer Price Index.

How Does Raising Minimum Wage Affect Businesses?

Raising the minimum wage comes with its pros and cons for businesses. Here are a few you should pay attention to.

The Pros!

It boosts the economy. As individuals make more money the economy and consumerism can experience an uptick and increase in spending.

Helps employees and their families. According to Mayor Todd Gloria of San Diego, “This increase means a better ability to make ends meet, put food on the table and spend in our local businesses.” As he says this increase is in line with the high costs of living.

The Cons!

Can cause a stalled job market. Due to increased costs in doing business, companies can find themselves entering a hiring freeze. This can cause a domino effect of unemployed people or people who have recently graduated college saturating the job market.

The costs of products can increase. An increase in wages can add to the overhead costs of operating a business, which may result in price inflation for consumers. Over time, this could cause a higher cost of living, or increase an already high cost.

How Do I Know If I Live Within San Diego City Limits?

If your business is located anywhere in the highlighted areas below you are a part of San Diego City limits, and this additional minimum wage raise applies to you.

Still, have questions? We’d love to help you and your business go forward with these new changes. Contact us today.

San Diego City Minimum Wage Media Release

San Diego Minimum Wage Notice

*must be posted where employees can visibly see