California is planning to raise its minimum wage from $16.90 to $17.40 an hour in 2027, representing the highest pay floor of any U.S. state. According to a July 31 release from California Governor Gavin Newsom, the new minimum wage will take effect on January 1, 2027. “For years, Donald Trump and Republicans have blocked efforts to raise the federal minimum wage while handing tax breaks to billionaires and big corporations," Newsom said. "California has chosen a different path — one that rewards work, grows the economy, and puts working families first." The U.S. inflation rate has also risen from 3.0% at the start of Trump's second term in January 2025, to a peak of 4.2% in May 2026, before falling to 3.5% the following month.