# Wage and Rent Controls on the Ballot In 2024 

Aside from ballot initiatives, some federal proponents of price controls suffered bad losses.

November 25, 2024 • Commentary 

By Sophia Bagley 

This article appeared in [*The War on Prices*](https://ryanbourne.substack.com/p/wage-and-rent-controls-on-the-ballot?utm_source=post-email-title&publication_id=1038460&post_id=151661609&utm_campaign=email-post-title&isFreemail=true&r=1rx53s&triedRedirect=true&utm_medium=email) on November 25, 2024.

Much of the 2024 presidential election campaign was dominated by the fallout from high inflation, with both candidates eventually advocating [forms of price contro](https://ryanbourne.substack.com/p/the-road-to-price-controls)l. This[ war on prices](https://www.amazon.com/War-Prices-Popular-Misconceptions-Inflation/dp/1952223865/ref=sr_1_1?crid=2HBVCJOZBGAJ9&keywords=%22the+war+on+prices%22&qid=1694201284&sprefix=the+war+on+prices+%2Caps%2C89&sr=8-1) is being fought at the state level too, with numerous ballot measures related to rent control and minimum wages voted on earlier this month. In some places new price controls or their broadening were rejected by the electorate; in others, voters affirmed the proposed changes.

Aside from ballot initiatives, some federal proponents of price controls suffered bad losses.

First, the good news.

- California rejected the opportunity to extend rent control. Proposition 33 asked voters to choose to remove statewide restrictions on the scope of local rent cap laws. Had it passed, Prop 33 could have seen localities expand rent control to all rental properties built after 1995, including single-family homes and condos that are currently exempt, and even allowed them to control rents between tenancies–potentially affecting [millions ](https://ryanbourne.substack.com/p/californians-shouldnt-turn-the-clock)of properties. That would have brought bad outcomes, for all the reasons [we outlined recently](https://ryanbourne.substack.com/p/californians-shouldnt-turn-the-clock). Thankfully, voters tanked the initiative [60 percent to 40 percent](https://www.nytimes.com/interactive/2024/11/05/us/elections/results-california-proposition-33-expand-local-rent-control.html), marking the third time voters have rejected such a proposal.
- Not long after a scandal in which California Governor Gavin Newsom was [accused of exempting](https://www.bloomberg.com/news/articles/2024-02-28/panera-bread-exempt-from-california-s-minimum-wage-increase-for-fast-food-worker) Panera Bread from the state’s new fast-food minimum wage, Californians narrowly [rejected](https://www.nytimes.com/interactive/2024/11/05/us/elections/results-california-proposition-32-raise-minimum-wage.html) the chance to increase the state’s headline minimum wage to $17 per hour and then further to $18 in January 2025 for large employers (and by January 2026 for smaller ones) by a margin of 51 percent to 49 percent. Extensive [research shows](https://www.nber.org/papers/w28388) high minimum wage rates tend to hurt new and low-skilled workers by leading firms to cut hours or hiring opportunities. Increasingly, though, [economists have realize](https://www.aeaweb.org/articles?id=10.1257/jep.35.1.51)d that apparently small aggregate job impacts associated with some wage floor hikes can reflect other margins of adjustment from businesses — such as reducing workplace amenities, non-pay benefits, workers’ scheduling freedom, substituting towards more experienced employees and other things that lessen the quality of the job or opportunities for low-skilled workers.
- Massachusetts voters turned down a proposal to raise the state’s tipped minimum wage incrementally, starting at 64 percent of the state minimum in January 2025, and reaching full parity by 2029. In tipped industries, more aggressive wage mandates can sometimes lead to unintended consequences for take-home pay. For example, when Washington, D.C. raised its minimum wage for tipped workers, many restaurants struggled with increased payroll costs. This led some to close, while others introduced surcharges to cover the higher wages. These surcharges may have influenced customers [to tip less](https://dcist.com/story/23/12/12/initiative-82-one-year-later-dc-restaurant-worker-wages-service-charges/), which, in turn, can reduce overall earnings for some employees.
- [Massachusetts](https://ballotpedia.org/Massachusetts_Local_Governance_of_Rental_Properties_Initiative_(2024)), [Oregon](https://ballotpedia.org/Oregon_Limit_Rent_Increases_Initiative_(2024)#cite_note-SoS-1), and [Washington](https://ballotpedia.org/Washington_Rent_and_Fee_Increase_Limits_Initiative_(2024)) each attempted to place rent control measures on the ballot to expand rent regulations, although none of them succeeded.

It wasn’t all victories for freedom on wage-setting and rent prices, however:

- Missouri voted to raise its minimum wage to $13.75 per hour starting in 2025 and to $15 per hour in 2026, which means the hourly wage floor will increase from somewhere around 55 percent of median hourly earnings in the state to well above 60 percent within two years. This will be a very high minimum for roles in dining rooms, restaurants, for parking attendants, cashiers, and the state’s 83,000+ home health and personal care aide workforce. In the UK, big minimum wage hikes have seen more and more workers in the personal care industry moved to [on-call “zero hours contracts,”](http://eprints.lse.ac.uk/100538/1/nd_gg_sm_march_2019.pdf) as firms look for new ways to control their labor costs.
- Alaska also voted to increase its minimum wage rate to $15 per hour by 2027, along with enshrining paid sick leave for workers. Given median wages are much higher in Alaska than Missouri, this is unlikely to affect as many workers or industries (even controlling for population!)
- Arizona voted to prohibit employers from cutting the pay of tipped workers by up to 25 percent below the minimum wage.

Aside from ballot initiatives, some federal proponents of price controls suffered bad losses.

Vice President Kamala Harris, of course, lost the presidential election on a platform of introducing an [anti-price gouging law for groceries](https://www.cato.org/commentary/what-kamala-harris-doesnt-get-about-food-costs), a [national rent control plan](https://www.cato.org/commentary/joe-bidens-rent-control-plan), and more restrictions on[ so-called “junk fees.”](https://www.cato.org/briefing-paper/junk-fees-or-junk-economics) Although her opponent, President-elect Donald Trump, also promised a cap on credit card interest rates, it’s fair to say that he was not as enamored with new price controls as Harris was.

Senator Bob Casey from Pennsylvania also lost. He had [blamed](https://bobcasey.com/issue/lowering-costs-and-fighting-greedflation/) companies for the recent inflation, sponsoring [numerous ](https://www.congress.gov/bill/118th-congress/senate-bill/3803/cosponsors)[populist](https://www.congress.gov/bill/118th-congress/senate-bill/3819/text) [bills ](https://www.congress.gov/bill/118th-congress/senate-bill/916/cosponsors)on issues like shrinkflation and “greedflation,” while commissioning [multiple studies](https://www.casey.senate.gov/greedflation) on these topics.

While recent high inflation has led many politicians to blame corporations for high prices and push for price controls, the outcomes of many ballot initiatives (and, indeed, the presidential election) suggest that voters remain unconvinced. Unfortunately, these electoral defeats are already being interpreted by some heterodox economists and would-be price controllers as evidence that politicians didn’t go far enough in using the power of government to compel low prices.

##### About the Author 

![Sophia Bagley - cropped](/sites/cato.org/files/styles/author_picture/public/2023-11/sophia-bagley-cropped-1.jpg?itok=BLX7fmWK) 

##### Sophia Bagley 

Research Associate