The cost of living is going up, but pay raises are coming for some people. The City of San Diego will increase the minimum wage to $16.30 on Jan. 1, 2023 — $1.30 higher than the $15 rate in 2022, making it the single largest increase in San Diego’s history. For a full-time worker, this would amount to a $33,800 annual salary.

In May 2022, the city projected minimum wage would only increase by 25 cents to $15.25 at the start of 2023 — and it would reach $16 at the start of 2026. It also anticipated California’s minimum wage would remain at $15, but the first sign of change came when the state announced it would increase its minimum wage to $15.50 at the start of 2023, effective for all employees.

Why the big increase?

In July 2016, the City of San Diego passed the Earned Sick Leave and Minimum Wage Ordinance, allowing San Diego to set its own minimum wage — provided it’s higher than the state + federal rates. Starting in 2019, the law also required this rate to increase as the Consumer Price Index (CPI) rises.

In August 2022, the CPI rose 8.1% when compared to the same month in 2021. The $1.30 increase to the minimum wage roughly matches this percentage — it’s actually slightly higher.

Who will be impacted?

All employers in the City of San Diego will be required to raise their hourly minimum wage to $16.30, regardless of their size. Any employee who works at least two hours a week must receive this pay.

If you currently make more than $16.30/hour, your employer is not required to increase your wage, even if your starting pay was above the minimum.

Locals should also be aware this can impact the cost of services — particularly those dependent on workers receiving minimum wage. Historically, similar motions have resulted in HOA fees to increase or businesses — particularly small + local ones — to raise prices to ensure they can pay their employees.