California closed the loophole on its failed 2014 plastic bag ban and raised its minimum wage to $16.90 on January 1, 2026—the latest moves in a decades-long experiment testing whether aggressive regulation can coexist with economic growth. Many retailers began phasing out plastic bags weeks before the deadline, as Los Angeles-area supermarkets made plastics non grata at checkout in late 2025. The original bag ban backfired spectacularly, increasing plastic waste in landfills by 47% as stores sold thicker 'reusable' bags that nobody reused. Now the state is trying again, banning all plastic bags at checkout.
These two policies—one environmental, one economic—illustrate California's role as America's regulatory laboratory. The state of 39 million people tests ideas that other states watch closely: sometimes to copy, sometimes to avoid. The minimum wage has more than doubled since 2014, from $8 to $16.90, with automatic inflation adjustments written into law. Meanwhile, Los Angeles hotel and airport workers scored a major victory when the hotel industry's referendum campaign to block their $30 minimum wage fell short by 9,000 signatures in September 2025. The ordinance took effect immediately, with wages set to hit $25 in July 2026, $27.50 in 2027, and $30 by 2028—just in time for the Olympics. The plastic bag saga shows California can correct course when experiments fail, even if it takes a decade.
Advocates for California businesses on legislative and regulatory issues.
LA
LA Alliance for Tourism, Jobs and Progress
Business Coalition
Status: Lost referendum challenge; collected 140,774 signatures but only 84,007 valid vs 92,998 required
Coalition of hospitality and travel organizations opposing Los Angeles's $30 hotel worker minimum wage ordinance.
Timeline
Plastic Bag Ban and Wage Hike Take Effect
Implementation
California bans all plastic bags at stores, offering only recycled paper bags for 10+ cents. Minimum wage rises to $16.90, part of 794 new laws.
Retailers Begin Early Plastic Bag Phase-Out
Implementation
Los Angeles-area supermarkets and grocery stores stop offering plastic bags weeks before the January 1 deadline, making 'plastics non grata at checkout.'
LA Hotel Wage Referendum Fails to Qualify
Electoral
City Clerk certifies referendum petition fell short with 84,007 valid signatures vs 92,998 required. Ordinance takes effect immediately, setting $25/hour wage for July 2026.
Hotel Wage Ordinance Temporarily Suspended
Electoral
LA Alliance for Tourism submits 140,774 signatures for referendum, temporarily suspending enforcement of $30 hotel worker wage ordinance during verification.
Mayor Bass Signs Olympic Wage Ordinance
Labor
Mayor Karen Bass signs Citywide Hotel Worker Minimum Wage Ordinance, establishing phased increases to $30/hour by 2028 for hotels with 60+ rooms.
LA Hotel Worker Wage Referendum Campaign Succeeds
Electoral
LA Alliance for Tourism submits 140,000+ signatures—exceeding 93,000 required—to suspend enforcement of $30 hotel worker minimum wage ordinance pending 2026 ballot vote.
Malibu Suspends Minimum Wage Increase
Local
Malibu City Council approves one-year suspension of scheduled minimum wage increase to support businesses affected by Palisades Fire.
LA Passes $30 Hotel Worker Wage
Labor
Los Angeles City Council approves ordinance raising hotel and airport worker minimum wage to $30/hour by 2028, timed for FIFA World Cup and Olympics tourism boom. Mayor Karen Bass signs into law.
Voters Narrowly Reject $18 Wage
Electoral
Proposition 32 fails 51-49%, first statewide minimum wage hike rejected since 1996. Would have raised minimum to $18 by 2025.
Newsom Closes Plastic Bag Loophole
Environmental
Governor signs SB 1053, banning all plastic bags including thicker ones, fixing the failed 2014 ban. Takes effect January 1, 2026.
Fast Food Minimum Hits $20
Labor
AB 1228 raises fast-food worker minimum wage to $20/hour for chains with 60+ locations, creating sector-specific wage floors.
Grocers Back New Bag Ban
Industry
California Grocers Association endorses SB 1053, reversing opposition to embrace total plastic bag ban as 'natural next step.'
Plastic Waste Surges Despite Ban
Data
CalRecycle data shows 231,072 tons of plastic bags in landfills—47% more than 2014, proving the ban failed due to thicker bag loophole.
Voters Uphold Bag Ban Despite $6M Campaign
Electoral
Proposition 67 passes 53-47%, making California first state with voter-approved bag ban. Plastics industry outspent environmental groups 4-to-1 and lost.
California Commits to $15 Minimum Wage
Labor
Jerry Brown signs SB 3, making California first state to commit to $15 minimum wage by 2022, with inflation adjustments thereafter.
Brown Signs First Plastic Bag Ban
Environmental
Governor Jerry Brown signs SB 270, banning single-use plastic bags but allowing thicker 'reusable' ones—a loophole that will backfire.
California Passes AB 32 Climate Law
Environmental
Governor Schwarzenegger signs Global Warming Solutions Act, first comprehensive state greenhouse gas reduction program, setting precedent for aggressive environmental regulation.
Ireland Introduces Plastic Bag Tax
International
Ireland's €0.15 levy on plastic bags cuts usage 90% within weeks, becoming model for California and other jurisdictions.
The revised plastic bag ban works where the 2014 version failed, cutting plastic waste by 60-80% as Ireland and Denmark achieved. California's minimum wage adjustments keep pace with inflation without triggering mass unemployment, as academic studies from UC Berkeley suggest. Other blue states adopt both policies: New York, Illinois, and Washington pass similar laws by 2028. Republicans frame California as a cautionary tale in 2026 and 2028 elections, but economic data shows the state's GDP growing faster than national average. By 2030, half of Americans live under California-style environmental and labor regulations.
2
Plastic Ban Succeeds, Wage Hike Stalls
Discussed by: Business groups, moderate economists, California Chamber of Commerce
The plastic bag ban achieves its environmental goals—stores adapt, consumers bring reusable bags, plastic waste drops sharply. But the minimum wage trajectory hits limits. Proposition 32's defeat signals voter concern about costs, inflation, and small business survival. Future wage increases face ballot challenges or legislative rollbacks as Republicans gain ground in 2026-2028 elections. California keeps automatic inflation adjustments but caps them lower or exempts more small businesses. The state becomes known for environmental leadership while moderating on economic regulation.
3
Backlash and Business Exodus
Discussed by: California Chamber of Commerce, Republican legislators, business relocation consultants
The cumulative weight of 794 new laws in 2026 alone triggers business backlash. Major retailers threaten to reduce California footprint over plastic bag costs and minimum wage burdens. Tesla's 2021 move to Texas becomes a template: high-profile companies relocate headquarters while keeping California sales presence. By 2028, California's unemployment rate exceeds national average for first time in a decade. Governor Newsom's successor faces pressure to roll back regulations. The 2028 governor's race becomes a referendum on whether California over-regulated itself into decline.
4
Federal Pre-Emption Under New Administration
Discussed by: Conservative legal scholars, federal regulatory analysts, industry groups
A Republican administration or Congress moves to pre-empt state environmental and labor regulations, arguing they create a patchwork that burdens interstate commerce. Federal legislation sets national standards below California's levels, sparking legal battles over states' rights. California and allied states sue, arguing federalism principles protect their regulatory authority. The Supreme Court decides whether states can exceed federal standards on minimum wage and environmental protection. California becomes the test case for how much policy experimentation the federal system allows.
5
Los Angeles $30 Wage Triggers Local Experimentation
Discussed by: Labor unions, progressive city councils, LA Alliance for Tourism
If Los Angeles voters approve the $30 hotel worker minimum wage in 2026, it establishes a new template: sector-specific wage floors tied to major events. San Francisco, San Diego, and other tourism-heavy cities follow with their own hospitality wage premiums. Fast food workers already have $20; hotel workers get $30; retail workers demand parity. Labor coalition responds to referendum by gathering signatures for a ballot measure raising the minimum wage to $30 for *all* Los Angeles workers, not just hospitality. By 2028, California's minimum wage landscape becomes a patchwork of local and sector-specific rates ranging from $17 to $30. Business groups warn of 'regulatory chaos' but workers gain unprecedented wage growth.
6
Hotel Industry Shifts Strategy After Referendum Defeat
Discussed by: California Hotel & Lodging Association, LA business groups, labor economists
Having lost the referendum battle, the hotel industry pivots from opposition to adaptation. Major hotel chains implement automation strategies—self-check-in kiosks, AI concierge services, reduced housekeeping frequency—to offset labor costs. Some properties reduce workforce size by 15-20% while maintaining operations. By 2028, Los Angeles hotels showcase a new operating model that other high-wage cities study: fewer but better-paid workers supported by technology. Labor groups celebrate wage gains but acknowledge unintended consequence of fewer jobs. The model influences debate in San Francisco, San Diego, and other tourism-heavy cities considering similar wage floors.
Historical Context
Ireland's Plastic Bag Tax (2002)
2002-Present
What Happened
Ireland introduced a €0.15 levy on plastic bags in 2002, later raised to €0.22 in 2007. The tax led to a 90% reduction in plastic bag usage within weeks. Revenue funded environmental projects, making it 'the most popular tax in Europe.' By 2014, Denmark had the lowest plastic bag use in Europe after introducing a similar tax in 2003.
Outcome
Short Term
Plastic bag usage dropped 90% almost immediately; public strongly supported the tax.
Long Term
Became permanent fixture; model for 100+ jurisdictions worldwide including California, South Africa, China, UK.
Why It's Relevant Today
Ireland proved that charging for bags works better than complex regulations with loopholes—a lesson California learned the hard way with its failed 2014 ban.
San Jose's Plastic Bag Ban (2012)
2012-Present
What Happened
San Jose implemented California's first major city plastic bag ban in 2012, prohibiting single-use plastic bags at grocery stores and requiring paper bags cost at least 10 cents. Environmental groups tracked results closely as a test case. The city saw an 89% reduction in plastic bags in storm drains, 60% in rivers, and 59% in residential areas within two years.
Outcome
Short Term
Dramatic reduction in plastic litter; retailers adapted with minimal disruption; some consumer complaints.
Long Term
Ban became normalized; data used to support statewide legislation in 2014; proved local bans could work.
Why It's Relevant Today
San Jose's success encouraged California's 2014 statewide ban, but the city's simple approach worked better than the state's loophole-riddled version.
New York's Minimum Wage Increase (2016)
2016-2021
What Happened
New York passed legislation in 2016 to gradually raise the minimum wage to $15 in New York City by 2018 and statewide by 2021, following California's lead. The phased approach allowed businesses to adjust. Economic studies tracked employment effects closely, with intense debate over job losses. Studies found minimal employment impact despite business warnings.
Outcome
Short Term
Wage increases implemented on schedule; restaurant and retail sectors adapted; predicted job losses didn't materialize.
Long Term
By 2024, New York City minimum reached $16; other states followed with similar phased increases; validated California model.
Why It's Relevant Today
New York's success following California's $15 minimum wage showed large states could raise wages substantially without economic collapse, encouraging California to keep pushing higher.
