California to raise minimum wage in 2027
PREVIOUS COVERAGE: California increases minimum wage in 2026
On Jan. 1, 2026 the state's minimum wage increased to $16.90 per hour to account for inflation. The threshold for exempt workers will rise to $70,304 per year.
SACRAMENTO - Governor Gavin Newsom on Friday announced that California’s statewide minimum wage will rise to $17.40 per hour starting January 1, 2027.
The automatic inflation-adjusted pay increase comes as state officials highlight strong first-quarter economic growth alongside federal wage stagnation.
What we know:
California’s statewide minimum wage will officially reach $17.40 per hour on January 1, 2027, continuing a steady climb from the $12 per hour rate in place when Governor Newsom first took office.
This new figure represents the highest statewide minimum wage in the U.S. and stands at nearly two-and-a-half times the federal rate, according to state officials.
Under California state law, these annual increases occur automatically to ensure baseline pay keeps pace with inflation.
In contrast, the federal minimum wage remains anchored at $7.25 per hour, where it has sat since 2009.
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This 17-year period marks the longest streak without a federal wage increase since the nation established a pay floor in 1938.
The state framed the upcoming increase alongside strong broader economic metrics, noting that California posted an annualized real GDP growth rate of 3.7% in the first quarter of 2026 while adding more than 131,000 jobs over the previous year.
What we don't know:
The announcement does not state how the $17.40 statewide baseline will affect higher local minimum wages established by specific cities or existing wage rules for targeted industries.
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Implementation guidance and reporting compliance details for small businesses have not yet been provided in the release.
What they're saying:
Newsom criticized federal lawmakers while defending California's economic framework.
"For years, Donald Trump and Republicans have blocked efforts to raise the federal minimum wage while handing tax breaks to billionaires and big corporations. 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."
The Source: This report is based on an official announcement and economic update released by the office of Gov. Gavin Newsom.