CA minimum wage to increase to $15.50 by January 1, 2023

Governor Gavin Newsom announced Thursday that the state's minimum wage will increase to $15.50 by January 1, 2023.

Newsom said the increase will benefit millions of California households struggling to keep pace with inflation. 

California law states that the minimum wage must increase when inflation increases more than 7%.

On Thursday, the California Department of Finance said the projected inflation for the 2022 fiscal year, which ends on June 30, will be 7.6%.

"The COVID-19 pandemic has resulted in persistent supply chain disruptions and labor market frictions have driven inflation to its highest rate in 40 years," the governor said.  These conditions have further been exacerbated by Russia's war in Ukraine," Newsom said.

The governor also proposed an $18.1 billion inflation relief package.

"We enacted the most comprehensive economic stimulus program in the nation last year, getting billions in immediate relief to millions of Californians. But many folks are still struggling, especially with high costs due to inflation, so we're leveraging this historic surplus to get money back into the pockets of Californians," said Newsom. 

The inflation relief package includes:

• $11.5 Billion for Tax Refunds to Help Address Inflation. As the entire country faces increasing costs due to inflation, Governor Newsom proposed getting $400 checks to every eligible registered vehicle owner, capped at two checks per individual.
•  $2.7 Billion for Emergency Rental Assistance. Governor Newsom is proposing significant state funds for qualified low-income tenants who requested rental assistance before March 31, helping these Californians get the support they need. 
• $1.4 Billion to Help Californians Pay Past-Due Utility Bills. As Californians continue to face difficulties in paying for utility bills, this investment expands upon last year's utility relief program to continue this vital support - $1.2 billion for electricity bills and $200 million for water bills.
•  $933 Million for Hospital and Nursing Home Staff. Providing up to $1,500 to hospital and skilled nursing facility workers who have been delivering care to the most acute patients during the COVID-19 pandemic and saved thousands of lives.
• $750 Million for Free Public Transit. Governor Newsom is proposing incentive grants to provide three months of free public transportation for communities throughout the state.
• $304 Million to Make Health Coverage More Affordable for Middle-Class Families. This extends health insurance premium assistance under Covered California for families of four earning up to $166,500 annually, upwards of 700,000 Californians.
• $439 Million to Pause the Diesel Sales Tax. Bringing relief to the commercial sector and drivers, Governor Newsom is proposing a 12-month pause in the sales tax rate for diesel fuel that would provide upwards of $439 million in relief.
• $157 Million to Waive Child Care Fees for Low-Income Families. Making state-subsidized preschool and child care more affordable, benefitting 40,000 low-income California families with savings of up to $595 per month.     
  

"This inflation relief package will help offset the higher costs that Californians are facing right now and provide support to those still recovering from the pandemic," Newsom said.

The increase is the highest of any state.in the country.