For the first time, a plurality of California voters has rejected a statewide minimum wage increase, reflecting heightened concerns about the affordability of everyday life.
Proposition 32 would have raised California’s minimum wage to $18 per hour effective in 2025 for employers of more than 25 people and effective in 2026 for others. The California Secretary of State finalized the count on Prop. 32 yesterday, tallying 50.8% of voters in opposition and 49.2% in support.
Prop 32’s defeat sends a clear message to lawmakers that Californians are grappling with a tough reality: Rising labor costs are pushing prices higher for essential goods and services, straining family budgets and making it harder to make ends meet.
“CalChamber opposed Prop 32 because it would have resulted in higher costs for small business employers and consumers,” said CalChamber President and CEO Jennifer Barrera. “With the economy and costs top of mind for many voters this election, that message appears to have resonated.”
Rising Costs Strain Working Families
While supporters of Prop 32 argued that raising the minimum wage was the answer to rising living costs, critics highlighted the ballot measure’s unintended consequences — even higher prices for everyday essentials, including meals, childcare and transportation. These rising costs, combined with inflation, are a significant burden for families already struggling to make ends meet.
Polls showed that voters shared these concerns as well. In fact, polling showed that voters were aware of the state’s new fast food minimum wage increase and the impact it has had on small businesses and consumer food costs. The jump to a $20-per-hour minimum wage for fast food workers has already resulted in noticeable price hikes at fast food chains, disproportionately affecting families who rely on affordable meals.
In rejecting Prop 32, voters are demanding a balance between fair wages and policies that keep costs down for families, ensuring they aren’t priced out of basic needs.
As the state moves forward, it is clear that ensuring affordability and adopting a balanced economic framework must be central to future policy discussions.
Read more about other 2025 minimum wage changes in our free New 2025 Labor and Employment Laws: What Employers Need to Know white paper. CalChamber members can access the white paper here.
