California voters have turned down a proposal to raise the state’s minimum wage to $18 per hour in a narrow vote. This marks the first failure of a minimum wage hike initiative in the United States in nearly three decades. The final results, delayed by two weeks of counting due to close margins, showed 49.2 percent in favor of the increase, not meeting the required threshold for passage.

The voting results displayed significant regional differences. While the majority of Bay Area and coastal counties backed the measure, exceptions included San Luis Obispo, Orange, Ventura, and Del Norte counties. In contrast, most inland counties opposed the raise, except for Alpine and Imperial.

Currently, California’s minimum wage stands at $16 per hour. However, in 2023, Governor Gavin Newsom approved a $20 per hour minimum wage for certain fast-food establishments, affecting those with over 60 locations. This led to a surge in automation and worker layoffs. Governor Newsom has consistently defended wage increases, arguing they empower workers.

Rebekah Paxton, research director for the Employment Policies Institute, stated that the perceived negative economic impacts of the fast-food minimum wage law swayed voters. “Californians are sending Gavin Newsom and the [Service Employees International Union] a clear message: They’re sick of being lab rats for their pet projects,” she said.

This is the first minimum wage hike taken up by a state that has been defeated since 1996, when voters rejected initiatives in Missouri and Montana.

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