California began decoupling its state minimum wage from the federal minimum wage in 2000, moving its state minimum wage to $5.75 per hour, 50 cents higher than the federally mandated wage of $5.15. Since then, the gap between California’s wage and the federally mandated wage has only grown. Today, California’s statewide minimum wage is $16.50, more than double the federal wage.

During that same period, California’s labor force participation rate fell 5.1 percentage points, from 67.2% in 2000 to 62.1% in 2024—a 7.6% decline. If California had kept its labor participation rate equal to what it was in 2000, the state would have an additional 2 million workers in its labor force.

Source: Federal Reserve Bank of St. Louis

Low-skilled workers left the workforce at an even faster pace. The labor participation rate of Californians without a high school degree fell by 14.6 percent from 2003 (the earliest available data) to 2024, while the participation rate for Californians with a high school diploma but no college fell by 10.4 percent.

Source: U.S. Bureau of Labor Statistics, Geographic Profiles of Employment and Unemployment 

Advocates of minimum-wage hikes should consider that these policies often hurt the very people they aim to help. Research, as well as California’s own experience, shows that the best way to help people climb the economic ladder is to expand opportunities, not restrict them.