Can you live on California’s minimum wage? Here’s how it stacks up against high living costs

California has the highest statewide minimum wage in the country at $15, which is more than double the $7.25 federal minimum. But is it enough?

Well, It depends who you ask.

Typical expenses like food, child care, medical, housing, transportation and more determine the living wage or hourly rate that an individual in a household must earn to support themselves and their family.

And with California average gas prices being the highest in the country, coupled with the steady rise in home, rent and food prices, Lizzet Aguilar Figueroa with The Fight for $15 and a Union Campaign said the millions of minimum wage adult workers aren’t earning enough to live comfortably.

“$15 isn’t enough to live a life with dignity...at minimum we should be making $20,” said a California leader of the minimum wage advocacy movement. Figueroa spoke with The Bee in Spanish, using a translator for the interview.

And some minimum wage workers are earning even less. The statewide minimum wage for employers with 25 or fewer employees recently increased $1 in 2022 to $14 an hour, according to the California Department of Industrial Relations’ minimum wage page.

According to the official California schedule for minimum wage rate, which has steadily increased $1 once a year since 2019, it could take at least five years for the state minimum wage to reach $20.

Which is about how long it took for California to raise it’s minimum wage to $15 after former Gov. Jerry Brown signed it into state legislation in 2016.

Minimum wage vs. living wage

In 2019, California reached a minimum wage of $12 for employers of 26 employees or more.

During that time, the statewide living wage for a single adult with no children was $18.66 and the poverty wage was $6.13, according to Massachusetts Institute of Technology’s living wage calculator. In Sacramento, the living wage for a single adult with no children was $16.42 and the poverty wage was $6.13.

And as the number of adults and children in the home increased, so did the living and poverty wage.

“There are so many people that can then disregard the argument the we need to raise the minimum wage...maybe for an 18-year-old $15 an hour is enough,” said J. Paul Leigh, a professor in the Department of Public Health Sciences at the UC Davis School of Medicine. “But it’s certainly not enough for a 29-year-old and it’s certainly not enough for a 29-year-old with a child.”

Leigh, an expert on the effects of minimum wage on public health, calculated the cumulative national inflation from January 2019 to January 2022 (10.7%, he said) to find a rough estimate of California living and poverty wage.

Applied to the 2019 MIT calculation, that would make a statewide living wage in 2022 roughly $20 and the poverty wage an estimated $7. Both estimates are a little lower than the true wages, because according to Leigh, California’s inflation is usually higher than the U.S.

In Sacramento, the living wage for a single adult with no children is about $18 and the poverty wage is roughly $7.

And the math checks out: The buying power of $18.66 in 2019 is just over $20.60 now, according to the Bureau of Labor Statistics CPI inflation calculator. A 10.7% inflation rate.

According to a Public Policy Institute of California 2021 poverty report, nearly one in six Californians were not in poverty but lived fairly close to the poverty line. Sacramento County’s poverty rate was 14.8% while other counties like Yolo, 20.9%, Los Angeles County, 20.8%, Santa Barbra, 20.7%, showed the highest poverty rates.

In short: people on minimum wage are earning less money than they need to support themselves and their families.

California expenses

The Golden State has always been expensive. Here’s, in general, what basic needs cost now.

Gas

The current statewide average price for a gallon of regular unleaded gas is $4.65.

Groceries

With a more than 7% inflation rate in 2021, grocery prices have also risen.

The MIT living wage calculator estimated, in 2019, annual grocery costs for a single adult totaled $3,792 a year. By December 2021, that was worth roughly $4,200.

Housing

As of December 2021, the typical value of a home in the Sacramento area was more than $475,000, up nearly 21% over the past year. And the average rent for a one-bedroom apartment is currently $1,595, up 14% compared to a year ago.

‘Simple, direct’ improvement

As a national debate on federal minimum wage continues, not everyone is on board with raising it.

Some argue that raising the minimum wage would cause employers to reduce their staff or hire fewer people altogether. But researchers at UC Berkeley debunked this idea finding that significant increases in minimum wage have little, if any, impact on employers’ hiring decisions.

“Raising the minimum wage is a simple, direct way that we can improve the incomes of low-wage workers, pull many poor families out of poverty and pull many children out of poverty,” said Ken Jacobs, chair of the UC Berkeley Labor Center, in a Berkeley News article.

In fact, the researchers found a higher minimum wage could produce benefits not just for workers, but for their employers, communities and the economy.

Know your rights

In 2020, millions of workers ages 16 and older made up 55.5% of all wage and salary workers, according to the U.S. Bureau of Labor Statistics. Of those, 1.5% made the federal minimum wage or below that.

In California, most employers are subject to both state and federal minimum wage laws, according the official state minimum wage page.

And since California’s current minimum wage rate is higher than the federal minimum wage rate, all California employers who are subject to both laws must pay their workers at least $15 an hour (if they have 26 employees or more) unless their employees are exempt under state law.

And employees working in cities and counties where the minimum wage is higher than $15 must be paid the local wage.

Here’s what you need to know to protect yourself while working a minimum wage job in California, according to the state:

• The minimum wage is an obligation of the employer and can’t be waived by any agreement.
• If your employer doesn’t pay your at least $15 an hour, you can either file a wage claim with the Division of Labor and Statistics Enforcement or file a lawsuit in court against your employer to recover the lost wages.
• If your employer retaliates against you because you questioned them about being paid minimum wage, you can file a discrimination or retaliation complaint with the Labor Commissioner’s Office.

This story was originally published January 26, 2022 at 5:00 AM.