NEW: California’s minimum-wage earners struggle to survive: report

Despite their wages exceeding federal poverty standards, minimum-wage earners in California, known for its high living costs, are struggling to make ends meet, according to a new report.

Starting January 1 this year, California raised the minimum wage to US$16 per hour, significantly higher than the federally mandated standard of US$7,25 per hour.

However, it still posed a challenge for many low-wage workers to afford basic necessities in the state, primarily due to skyrocketing living costs, according to a report released by the state’s Legislative Analyst’s Office (LAO) on Monday.

The report delved into the demographics of California’s low-wage workforce, defined as those earning US$17,50 or less per hour.

This group is dominated by home health and personal care aides, followed by fast-food workers. Cashiers, retail salespeople, waiters, farmworkers, and packagers round out the list of common low-wage occupations.

Interestingly, the data shows a trend – nearly 60 percent of low-wage workers are Latino, and half of them are immigrants. Additionally, most share their living spaces with at least one other worker and typically do not have young children.

While the minimum wage recently increased, the impact on affordability varies greatly depending on household size and location, the report said.

California, the nation’s most populous state, also suffers from some of the highest housing costs. While housing isn’t the only pressure point, healthcare, taxes, food, and transportation all contribute to the state’s ever-growing cost of living.

Last week, the LAO published a report analyzing the impact of inflation on the state’s households, which exposed Californians feeling the sting of inflation more acutely than most Americans.

Essential goods and services had seen a significant jump in price compared to pre-pandemic levels, the earlier report showed.

To understand where the minimum-wage workers live in the state, the report examined housing affordability across the state for minimum wage earners. It found major metropolitan areas and much of the Central Coast are simply out of reach, regardless of how many people in the household earn wages or if there are children.

Single parents with minimum wage jobs faced an even bleaker reality, the report found. Only three counties offer affordable housing options. Only those without children and those with two earners in a household may find affordable housing in some rural and mid-size metro areas.

The report also found big wage differences across California regions, with wages in rural and less populous counties 20 percent lower than the state average and wages in more developed areas 20 percent to 50 percent higher than the state average.

The report also highlighted a concerning trend: upward mobility slows significantly for low-wage earners in their early 30s. This translates to a significant portion of the low-wage workforce being over 35, with a quarter even exceeding 50 years old.

The LAO report urged policymakers to consider a more active role in addressing affordability challenges, suggesting setting regional minimum wages or facilitating coordination between local governments on minimum wage policies. – Xinhua