Above: A Nexstar Media Wire video on the history of the federal minimum wage in the U.S. SAN DIEGO (FOX 5/KUSI) — Workers in San Diego are set to receive a pay bump heading into the new year, when a new minimum wage goes into effect for the city. Beginning on Jan. 1, wages for minimum wage workers inside the city's bounds will increase by nearly a half-dollar — from the current $16.85 per hour rate to $17.25 an hour. “This milestone reflects years of hard work and advocacy to put more money directly into the pockets of hardworking San Diegans,” San Diego Mayor Todd Gloria said in a release. “By raising the minimum wage, we are helping working families deal with the rising cost of living and better make ends meet.”  New labor laws making changes for California’s workers in 2025 The upcoming change in baseline pay for workers inside San Diego is thanks to a 2016 ordinance that sought to catch the city up with then-new laws at a state level that kickstarted California's trek up to a $15 minimum wage in 2022. Once a $15 minimum wage was reached, both the state and city pivoted to annual adjustments based on changes in the cost of living, using the national consumer price index as a benchmark. At the state level, these raises were capped at 3.5% year-over-year. In the city of San Diego, however, any additional boosts were unrestricted, effectively pushing the local minimum wage above California's. That being said, the pay bump will likely not reach everyone: Those in industries where state law has made changes to minimum rates, like fast-food, or who already earn above the baseline will still be able to receive the higher rate. It will also not impact those who work outside city lines. The city of San Diego's wage increase comes just months after voters across the state narrowly rejected a proposition that would have increased the statewide minimum wage to $18 an hour come Jan. 1, 2025. Depending on future changes in the consumer price index, the city of San Diego could reach an $18 minimum pay as early as 2026 or 2027.