San Diego’s minimum wage is set to increase to $17.25 per hour on January 1, 2025, outpacing California’s state minimum wage and raising questions about the impact on local businesses and workers.
At a Glance
- San Diego’s minimum wage will rise to $17.25 per hour, effective January 1, 2025
- The increase is part of the city’s Earned Sick Leave and Minimum Wage Ordinance
- San Diego’s new minimum wage will be higher than California’s state minimum of $16.50
- Employees will continue to earn sick leave, with a limit of 40 hours per year
- The ordinance applies to all industries and businesses, with no exceptions
San Diego Leads in Wage Increases
San Diego is set to implement a significant minimum wage increase, surpassing the state’s rate. Starting January 1, 2025, the city’s minimum wage will rise to $17.25 per hour, marking a 40-cent increase from the current $16.85. This change is part of San Diego’s Earned Sick Leave and Minimum Wage Ordinance, approved in 2016, which mandates annual adjustments based on the Consumer Price Index.
The new rate will exceed California’s state minimum wage, which is projected to be $16.50 in 2025. This discrepancy highlights San Diego’s commitment to addressing the rising cost of living for its residents. The ordinance applies universally across all industries and businesses within the city, with no exceptions, ensuring a broad impact on the local workforce.
Many San Diegans will soon see more money in their paychecks! Starting Jan. 1, the minimum wage in the City of San Diego will increase from $16.30 to $16.85 an hour. For more on the increase and the City's Earned Sick Leave and Minimum Wage Ordinance: https://t.co/8Kv78y69mB
— City of San Diego (@CityofSanDiego) December 29, 2023
Impact on Workers and Businesses
The wage increase is expected to provide financial relief to many San Diego workers struggling with inflation and high living costs. Mayor Todd Gloria has expressed support for the measure, emphasizing its potential to improve the lives of working families. However, the impact on local businesses, particularly small enterprises, remains a subject of debate.
“This milestone reflects years of hard work and advocacy to put more money directly into the pockets of hardworking San Diegans,” said Mayor Todd Gloria. “By raising the minimum wage, we are helping working families deal with the rising cost of living and better make ends meet.”
Alongside the wage increase, the ordinance maintains provisions for sick leave benefits. Employees will continue to accrue sick leave, which can be used for personal or family medical care, with a cap of 40 hours per year. This aspect of the law aims to provide a safety net for workers, balancing financial compensation with health considerations.
Broader Economic Implications
The wage increase comes at a time when San Diego’s poverty rate has shown improvement, decreasing from over 12% in 2016 to 10.1% in 2023. This trend suggests that previous wage increases may have contributed to reducing financial hardship for some residents. However, the relationship between minimum wage increases and overall economic health remains complex and debated among economists.
It’s worth noting that a recent proposal to raise California’s minimum wage to $18 failed in the 2024 general election. This outcome reflects the ongoing debate about wage policies at the state level. Despite this setback, advocates for higher wages in California have indicated their intention to continue pushing for increases.
“This isn’t the end—it’s the beginning of a renewed and energized movement for fair wages in California,” Joe Sanberg said.
