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Cost of living crisis

Lee proposed the minimum wage hike as part of her campaign for a U.S. Senate seat. Considering the current federal minimum wage stands at $7.25 an hour, her proposal is notably ambitious.

California already boasts one of the highest minimum wages in the country at $16 an hour. Additionally, there are specific industries with higher minimum wage rates set to take effect later in the year: fast food restaurant employers will see an increase to $20 an hour effective April 1, 2024, and healthcare facility employers will have their minimum wage increased to $25 an hour on June 1, 2024.

Lee argues that her push for a $50 minimum wage stems from the state's high cost of living.

“In the Bay Area, I believe it was the United Way, came out with a report that very recently $127,000 for a family of four is just barely enough to get by,” she said during a recent debate in San Francisco. “Another survey very recently: $104,000 for a family of one, barely enough to get by — low income because of the affordability crisis. And so just do the math.”

For an individual working 40 hours a week at $50 an hour, their annual earnings would amount to $104,000. To put things in perspective, the median household income in America was $74,580 in 2022, according to the Census Bureau.

Of course, not everyone has the opportunity to work 40 hours a week even if they want to. According to Labor Department data reported on by USA Today, 4.2 million Americans worked part-time in December because their employers cut their hours or they could find only part-time work.

When asked how her $50 minimum wage proposal would be economically sustainable for small businesses, Lee emphasized her entrepreneurial background, stating, “I owned and ran a small business for 11 years, I’ve created hundreds of jobs.”

She added, “I know what worker productivity means, and that means that you have to make sure that your employees are taken care of and have a living wage.”

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About the Author

Jing Pan

Jing Pan

Investment Reporter

Jing is an investment reporter for MoneyWise. He is an avid advocate of investing for passive income. Despite the ups and downs he’s been through with the markets, Jing believes that you can generate a steadily increasing income stream by investing in high quality companies.

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