Wage Theft in California: Minimum Wage Violations, 2014-2023

This report uses 2014-2023 data from the Census Bureau’s Current Population Survey Merged Outgoing Rotation Groups (CPS-MORG) to estimate minimum wage violations across four metropolitan statistical areas (MSAs or metro areas) of interest. Throughout this report, we provide two sets of estimates for each metro area: violation rates calculated using the lower state minimum wage rate and violation rates calculated using the higher primary metro area minimum wage rate, including the city minimum rates of Los Angeles, San Jose, San Diego, and San Francisco. In addition to estimating the overall impact of minimum wage violations in each of these areas, we identify a number of individual, industrial, and job characteristics that are associated with higher levels of wage theft. We further compare the relative effects of these predictors across areas to begin to understand which issues are particularly acute in which areas.

The key findings of this report include:

1. We estimate that an average of $2.3 to $4.6 billion in earned wages were lost by workers each year from 2014 to 2023 due to minimum wage violations across these four metro areas.
2. The majority of lost wages were in the Los Angeles MSA, where we estimate an average of $1.6 to $2.5 billion was lost a year during the study period.
3. Those that were paid below the minimum wage lost roughly 20 percent of their total paycheck on average, or nearly $4,000 in earned wages a year if working full-time.
4. The most impactful violations occurred in the San Francisco area, where workers lost an average of $4,300 to $4,900 annually to minimum wage violations.
5. The number of workers paid below both the state and primary metro minimum wages has more than doubled since 2014, growing particularly dramatically over the most recent year of the study (2023).
6. Workers employed in private households, food services and drinking places, and personal and laundry services are particularly likely across areas to experience minimum wage violations.
7. Workers without a college degree are 3-5 times more likely to experience minimum wage violations than those with a college degree.
8. Part-time workers are over 3 times as likely as full-time workers to experience minimum wage violations in both the San Diego and San Francisco areas, and between 2-3 times as likely in the Los Angeles and San Jose areas.
9. Both Black and Latinx workers are more likely than white workers to experience minimum wage violations across all areas.
10. Women are more likely than men to be paid under the minimum wage across all areas studied.
11. Noncitizens are roughly 60 to 70 percent more likely to experience a minimum wage violation than citizens in both Los Angeles and San Diego, and around 50 percent more likely to experience a violation in San Francisco (no significant different was found between these groups in San Jose).
12. Older and particularly younger workers are more likely to experience minimum wage violations than mid-career workers across all areas of interest.
13. The high-violation industries identified below are projected to account for over half of all employment growth by the end of the decade.