When local business and labor groups came out with their respective studies on the impacts of hiking L.A.’s minimum wage last week, the fact that they came to different conclusions – business opposing and labor supporting – was not surprising.

But the studies couldn’t even agree on what they were studying.

The business study, commissioned by the Los Angeles Area Chamber of Commerce and conducted by local consulting firm Beacon Economics, only looked at the economic impact of L.A. Mayor Eric Garcetti’s proposal to raise the wage to $13.25 an hour by 2017. Not surprisingly, the study concluded that this wage hike would result in businesses locating or expanding outside the city and that in turn would mean a loss of jobs.

When asked why the chamber did not ask Beacon to examine the impact of a $15.25-an-hour wage proposed by several council members, chamber policy director Ruben Gonzalez said, “Because as this study shows $13.25 an hour damages the economy and job creation. So another two dollars would be even more challenging.” 

The labor study, commissioned by the Los Angeles County Labor Federation and conducted by the Los Angeles Economic Roundtable and two UCLA labor institutes, only looked at the impact of the $15.25 an hour proposal. It did not even mention the $13.25-an-hour plan.

When asked why, Rusty Hicks, the federation’s executive secretary-treasurer, said, “$15.25 per hour along with earned sick leave and protection against wage theft is what families need to thrive in L.A.”

Bio Tax

Just as a plan for a biotech park near Los Angeles County-USC Medical Center gathers steam, an L.A. councilman has proposed giving biotech firms in the city a tax break.

Right now, biotech companies pay the city’s top gross receipts tax rate of $5.07 per $1,000 of revenues, though that will drop to $4.25 by 2015 thanks to previously enacted reductions.

City Councilman Mitch Englander this month introduced a motion to reduce or eliminate the city’s gross receipts tax for biotech firms, with the choice of whether to reduce or eliminate the tax to be made after city staff weighs in with a report.

Of course, most biotech firms have little or no revenue, especially in their early stages, and thus are already eligible for the city’s small-business exemption. But occasionally a biotech firm hits upon a blockbuster drug and enters a phase of explosive growth. And it’s keeping those firms in Los Angeles that this proposal is aimed at, said Lloyd Greif, chief executive of downtown L.A. investment bank Greif & Co. and chairman of the city’s Business Tax Advisory Committee. Three years ago, that committee proposed completely eliminating the gross receipts tax in phases.

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