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Newsweek: California Workers Lost $4,000 in Wages

Read the Newsweek article here.

 

A report from Rutgers University has found that California workers paid below the minimum wage lost on average nearly $4,000 a year over the past decade.

California’s minimum wage is currently set much higher than the federal minimum wage of $7.25 per hour. In January, the state set the minimum wage to $16 per hour and in April, the minimum wage for fast-food workers increased to $20 per hour. Meanwhile, starting June 1, the starting minimum wage for full-time healthcare workers will be $23 per hour.

Despite the Golden State having higher minimum wages than other states, the Workplace Justice Lab@Rutgers University found that California had serious minimum wage violations, which is when an employer pays their worker less. It is unclear what violations may persist in other states.

The recently published report, titled Wage Theft in California: Minimum Wage Violations, 2014-2023, looked at data from the Census Bureau’s Current Population Survey Merged Outgoing Rotation Groups to determine the number of minimum wage violations across four major metro areas in the Golden State—Los Angeles-Long Beach-Anaheim, San Jose-Sunnyvale-Santa Clara, San Diego-Carlsbad-San Marcos, and San Francisco-Oakland-Fremont.

According to the report, on average, California workers lost roughly $2.3 to $4.6 billion in wages each year from 2014 to 2023 due to minimum wage violations.

Those working full-time and paid below the minimum wage lost on average about 20 percent of their total paycheck per year, or almost $4,000.

Daniel Galvin, senior scholar at the Workplace Justice Lab@RU and professor at Northwestern University, told Newsweek in an email on Wednesday, “These are by definition the lowest-wage workers who can least afford to be underpaid. A 20% income loss—$4,000 per year on average—can force these workers to make really hard decisions about whether to pay rent or put food on the table.

“This type of wage theft also puts downward pressure on wages across entire industries, gives unscrupulous employers an unfair advantage over competitors who play by the rules, and can force workers to rely on public assistance programs, which drains public treasuries.”

“Few workers and their families can afford this kind of unexpected loss,” Jake Barnes, a researcher at the Workplace Justice Lab@RU, told Newsweek in an emailed statement on Wednesday. “These concerning levels of wage theft are likely to persist without active intervention, particularly given the marked increase in minimum wage violations observed between 2022 and 2023. We believe that these findings point to the need for strengthened enforcement capacity at the local and state levels to best ensure that Californians are paid what they deserve.”

Over the past decade, the number of workers paid below both the state and primary metro minimum wages have more than doubled since 2014. According to the study, this number grew “particularly dramatically” in 2023.

In terms of demographics, Black and Latinx workers are more likely than white employees to experience minimum wage violations. Meanwhile, women are more likely than men to be paid under the minimum wage. Age and education are also factors in violations. Workers without a college degree are three to five times more likely to experience minimum wage violations. Meanwhile, younger workers are more likely to experience them compared with mid-career workers.

Newsweek reached out to California’s Department of Industrial Relations via email for comment.

Dr. Janice Fine, director of the Workplace Justice Lab@RU, told local news outlet KTLA, “This is the time to be strengthening—not weakening—labor enforcement.” She added: “California is leading the way nationally in terms of strong state and local minimum wage laws, but our study shows that too many low-wage workers are not receiving the pay they are entitled to.”