California is planning to raise its minimum wage from $16.90 to $17.40 an hour in 2027, representing the highest pay floor of any U.S. state.

According to a July 31 release from California Governor Gavin Newsom, the new minimum wage will take effect on January 1, 2027. Newsom touted the move as a necessary step to help workers keep pace with the rising cost of living, particularly as the federal minimum wage has remained unchanged since it was raised from $6.55 to $7.25 an hour during George W. Bush's presidency. 

“For years, Donald Trump and Republicans have blocked efforts to raise the federal minimum wage while handing tax breaks to billionaires and big corporations," Newsom said. "California has chosen a different path — one that rewards work, grows the economy, and puts working families first."

Largely driven by tariffs, prices for a range of everyday household items have gone up significantly over the course of President Donald Trump's second term, according to data from Harvard University's Pricing Lab. That includes food and non-alcoholic beverages (up 4.6%), furniture and furnishings (6.2%), bread and cereals (4%) and pharmaceutical products (2.3%), when comparing pre- and post-tariff prices as of April of 2026. Since the U.S. and Israel engaged in war with Iran on February 28, gas prices are up more than 30%, from roughly $3 per gallon before the war started, to $4.

The U.S. inflation rate has also risen from 3.0% at the start of Trump's second term in January 2025, to a peak of 4.2% in May 2026, before falling to 3.5% the following month.