California just raised the minimum wage again. Is it enough to live on?
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- The Golden State raised minimum wage to $16.90.
- California cost of living runs about 40% above national average.
- Some California cities pay higher rates than the new minimum wage.
As the cost of living keeps climbing in California, wages are rising — but slowly.
On Thursday, Jan. 1, the state of California increased its minimum wage by 40 cents, bringing it to $16.90 per hour.
That’s more than $9 higher than the federal minimum wage, yet many Californians are still feeling the squeeze as everyday costs, from housing to groceries, continue to rise.
Is the new minimum wage enough to live on in California?
The Sacramento Bee went searching for the answer as part of How to California, a community-driven series to help readers navigate life in the Golden State.
Here’s what we found:
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How high is the cost of living in California?
Living in California comes with a high price tag.
According to RentCafe, the overall cost of living in California is about 40% higher than the national average.
Housing costs are especially steep — running 98% higher more than much of the United States — while utilities cost 34% higher, according to the latest data from the apartment search website.
Everyday necessities, such as food and clothing, also cost more in California, RentCafe reported in September.
Groceries in California are about 14% more expensive than the national average, and clothing costs about 13% more, RentCafe said.
Health care expenses, including doctor visits and dental care, are about 9% higher in the Golden State than other parts of the country, according to RentCafe.
“At the same time, non-necessary expenses such as entertainment and grooming services are 13% higher,” RentCafe said.
How much do Californians spend on housing? Health care?
A separate report from ConsumerAffairs, a consumer news and advocacy organization, found that Californians spend an average of $64,835 per year.
“This number reflects the typical amount residents devote each year to housing, health care, groceries, fuel and a variety of other goods and services,” ConsumerAffairs said in its Sept. 17 report.
On average, California residents spend about $12,188 on housing and utilities; $10,373 on health care and $4,708 on food and drinks purchased outside the home.
They also spend around $1,320 on gasoline and energy costs, with the remaining $36,245 going toward other personal expenses.
What you need to earn in California to make a living wage?
The new state minimum wage of $16.90 per hour falls considerably short of what it takes to get by in California, according to the Massachusetts Institute of Technology’s living wage calculator.
Based on the most recent data from February, a single adult with no children would need to earn about $28.72 an hour to cover basic living costs.
Meanwhile, a single parent with three kids would need to earn an hourly wage of $82.16. That’s almost five times the minimum wage.
MIT defines the living wage as “the hourly rate that an individual in a household must earn to support themselves and/or their family, working full-time, or 2,080 hours per year.”
In California, that means earning enough to cover essentials including housing, food, transportation and health care.
Here’s a look at how much you need to earn per hour to make a livable wage in California, according to the MIT living wage calculator:
- Single adult with no children: $28.72 an hour
- Single adult with one child: $50.83
- Single adult with two children: $64.17
- Single adult with three children: $82.66
- Two working adults with no children: $38.53
- Two working adults with one child: $46.95
- Two working adults with two children: $51.15
- Two working adults with three children: $60.47
Where can California workers earn more than minimum wage?
While California’s statewide minimum wage increased from $16.50 to $16.90 per hour, some workers already earn more, according to the California Department of Industrial Relations.
In 2024, fast food workers in California — employees of “national fast food chains” offering “limited-service” options — began earning a minimum of $20 per hour.
Some California health care workers can earn a higher minimum wage that ranges up to $25 an hour, depending on where they work and the type of facility that employs them.
Additionally, more than 20 cities just set local minimum wages above the statewide hourly rate of $16.90.
Among the cities that increased their minimum wage, West Hollywood had the highest wage increase — going from $19.65 to $20.25 per hour.
This story was originally published January 8, 2026 at 5:00 AM with the headline "California just raised the minimum wage again. Is it enough to live on?."
