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What you need to know: California’s statewide minimum wage will increase to $17.40 an hour on January 1, 2027 — nearly two-and-a-half times the federal minimum wage, which Donald Trump and Republicans continue to leave frozen at $7.25 an hour.
July 31, 2026 - SACRAMENTO – Governor Gavin Newsom today announced California’s statewide minimum wage will increase to $17.40 per hour beginning January 1, 2027 — which is higher than any current statewide minimum wage in the nation and nearly two-and-a-half times the federal minimum wage, which Donald Trump and Republicans in Congress continue to leave frozen at $7.25 an hour despite mounting everyday cost pressures for working families.
The federal minimum wage has been $7.25 an hour since 2009 – more than 17 years. This is the longest the federal minimum wage has gone without an increase since it was adopted in 1938. And during those 17 years inflation has dramatically raised the cost of living for working families.
“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.”
Governor Gavin Newsom
The increase is automatic under California law, which adjusts the minimum wage annually to keep pace with inflation.
Making California more affordable
California’s minimum wage has grown from $12 an hour when Governor Newsom took office to $17.40 an hour starting on January 1, 2027. The wage increase is part of a broader agenda to make life more affordable for Californians.
Under Governor Newsom, California has:
- Become the first state in the nation to provide free breakfast and lunch to every public school student.
- Made preschool free for all four-year-olds via universal transitional kindergarten.
- Expanded access to free and low-cost child care for nearly 500,000 children.
- Invested record funding in free summer school and before and after-school programs
- Launched the nation’s first Golden State Start program, providing 400 free diapers to every newborn before leaving the hospital.
- Expanded Paid Family Leave, allowing lower-income workers to receive up to 90% of their wages while caring for a new child or sick loved one.
- Launched CalKIDS, the nation’s largest children’s “baby bonds” — college and career savings accounts, automatically providing eligible children with up to $1,500 for higher education or career training.
- Capped security deposits at one month’s rent, lowering move-in costs for renters.
- Banned hidden “junk fees” so Californians see the real price upfront.
- Delivering up to $60 billion in utility bill relief rebates.
- Created CalRx, bringing affordable generic drugs and $11 insulin to Californians.
- Expanded Medi-Cal to provide health coverage to more Californians than ever before.
- Raised the minimum wage to $20 per hour for fast-food workers and $25 per hour for health care workers.
- Expanded the California Earned Income Tax Credit and delivered the largest state tax rebate in American history, putting billions back into the pockets of working families.
Supporting workers is good for business
Those investments have helped build one of the strongest economies in the world. California is now the fourth-largest economy on the planet, leads the nation in new business formation, attracts more venture capital than any other state, and remains America’s engine of innovation, manufacturing, agriculture, entertainment, and technology.
Since Governor Newsom took office, California’s annual GDP has grown by more than $1.18 trillion, reaching $4.25 trillion in 2025. First-quarter 2026 economic output reached an annualized $4.4 trillion, following annual GDP gains exceeding $200 billion in each of the previous two years.
California continues to lead the nation where it matters most — creating new businesses, attracting venture capital, driving technological innovation, expanding advanced manufacturing, growing high-tech industries, and producing more than any other state. In fact, the Golden State continues to be: #1 state for new business starts, #1 state for manufacturing, #1 state for venture capital funding, #1 state for high-tech business, and #1 state for agriculture.
California also remains home to more small businesses than Texas or Florida and continues to be America’s startup capital — with more than 4.3 million small businesses employing 7.6 million Californians.
When it comes to job creation during the first quarter, California added more than 131,000 jobs over the previous year — the largest increase of any state. California posted the nation’s second-fastest growth in the first quarter of 2026. Real GDP grew at a 3.7% annualized rate in Q1 2026.
Source: Office of the Governor
