Companies Cut Worker Hours After California’s $25-an-Hour Minimum-Wage

California's budget deficit has ballooned to $45 billion. Mr. Newsom projects that the new healthcare minimum wage would cost the state $4 billion more a year owing to higher Medicaid costs and compensation for workers at state-owned facilities. Legislative analyses warned about these costs, but Mr. Newsom signed the law anyway.

California’s current minimum wage for all workers is $16 an hour. Nearly all workers at healthcare facilities including janitors will have to be paid at least $25 an hour by 2028.

California’s wage minimums are another illustration of how progressive mandates boomerang. Average weekly earnings for leisure and hospitality employees in California have declined by 2.6% over the last year owing to a steep drop in hours worked. By contrast, those average weekly earnings rose 3% nationwide, 3.2% in Florida and 5.2% in Texas.

California’s wage minimums are another illustration of how progressive mandates boomerang. Average weekly earnings for leisure and hospitality employees in California have declined by 2.6% over the last year owing to a steep drop in hours worked. By contrast, those average weekly earnings rose 3% nationwide, 3.2% in Florida and 5.2% in Texas.

Average hourly earnings for California leisure and hospitality workers have also increased more slowly—2.1% compared to 3.8% nationwide—no doubt partly because the state’s softer labor market has reduced competition for workers.

When government raises wages above what the market commands, employers will increase prices and reduce labor. California, QED.