California turns to minimum wage hikes to offset high living costs. There’s a downside
Dan Walters
June 19, 2026
There are three immutable aspects of economic life in California today.
No. 1, Californians face the nation’s highest cost of living. It is 11% higher than the national average, according to the federal Bureau of Economic Analysis, including rents 53% higher than average and utilities 63% higher. It’s why California also has the nation’s highest poverty rate.
No. 2, the high cost of living, especially for housing, is the most important factor in the out-migration of Californians to other states. It has led to a net loss of 900,000 people since 2015, according to the Public Policy Institute of California.
No. 3, California’s unemployment rate, currently 5.3% of its labor force, has been among the highest of any state for the last half-decade, with more than a million jobless workers. It rises to 10.1% when it’s broadened to discouraged job seekers and those who work part-time but want full employment. This alternative measure is also the nation’s highest.
