Minimum Wage Hikes Will Not Save California Workers
After increasing wages by $1 each year since 2020, California could make history by passing the nation’s highest state minimum wage law this November. Earlier this year, a $20 minimum wage hike for over 500,000 California workers was passed and healthcare workers are set to receive a minimum wage of $25. Yet, aside from angering business owners and causing budget concerns for Governor Newsom, the laws have done little to shelter employees. No wonder — a California worker needs to earn over $197,000 a year to afford a median-priced home.
For several years I worked as a mid-level manager in Los Angeles and the Inland Empire where I received modest salary increases with each minimum wage hike — California employers are required to pay two-times the minimum wage for salaried workers. Yet, with rent increases as high as 10% each year, housing costs quickly eclipsed my pay. I urgently sought employment outside of California, before landing a chance job offer near my current apartment. My new salary will allow me to stay one lease longer. Many other workers are less fortunate.
Fast food workers make up “11% of all homeless workers in California”
The California Legislative Analyst’s Office released a March 2024 report analyzing the state’s minimum wage. In understated terms, it notes “housing in California’s major metro areas and much of the Central Coast is unaffordable for minimum-wage workers.’’ Speaking of metro areas, the progressive City of West Hollywood set the record for the nation’s highest minimum wage at $19.08 in 2023. However, the city’s median rent is $3,250 according to the most recent report by Zillow — It increased by 1.7% in less than two weeks.
Fast food workers make up “11% of all homeless workers in California,” according to a report by the Economic Roundtable. The same researchers report that a quarter of frontline fast food workers spend half their monthly pay on rent in Los Angeles. The remaining 89% of workers are forced into dangerously crowded dwellings. As a result, L.A. county ranks as having the most overcrowded housing in the nation according to a comprehensive series by the Los Angeles Times in 2022.
But if increasing the minimum wage to the highest rate in the nation is not enough for people to relocate from their fogged-up Toyota or overpacked studio, what is the solution? Fixing the housing crisis. Steve Berg, Chief Policy Officer at the National Alliance to End Homelessness and author of nearly a hundred articles on the topic argues lawmakers should “make more housing available and affordable so that fewer people become homeless.” Yet, building homes in California requires more than just cash and a hammer.
“In cities like New York and Los Angeles — zoning restrictions have facilitated acute housing shortages, with attendant surges in displacement and homelessness,” writes city planner M. Nolan Gray in his book, Arbitrary Lines: How Zoning Broke the American City and How to Fix It. Zoning regulations determine what can be built and where. These policies are often determined by local homeowners who have little incentive to accommodate people struggling to access shelter — after all, they benefit from inflating home values as a result of the low-housing supply. But at what point do Californian’s right to shelter take priority over the selfish interests of homeowners?
In 2009, Minneapolis answered this question with the Minneapolis 2040 Land Use Reform. The “de-zoning” regulations enacted several major pro-development initiatives, such as building height minimums and the removal of parking space minimums. The work has proven successful — Homelessness decreased 12% from 2017–22 according to the Pew Charitable Trusts.
California has made some progress in tackling its restrictive zoning laws, such as the passing of AB130 that says college students are not noise pollution. Nevertheless, California’s single-family zoning laws remain mostly intact, leaving a backyard barrier that must be undone to welcome more housing.
If California lawmakers get this right, they may find voter support by both business owners and minimum wage workers — not to mention, employees, like myself, may be able to afford to work in the Golden State.
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About the Author | Thomas Guzowski has significant professional experience working in the California housing industry. He currently works and rents in the Inland Empire.
