Consider L.A.’s minimum wage hiked.
The Los Angeles City Council on Tuesday voted 14-1 to support creating a citywide minimum wage, which will rise from the current statewide minimum of $9 an hour today to $15 an hour over the next five years.
The plan, which has drawn the ire of business groups but strong support from organized labor, will now be sent to City Attorney Mike Feuer, who will draft an ordinance for council members to vote on later this year.
As approved by the council, the wage plan does not include a requirement that businesses provide paid sick leave for workers, something that a council committee slipped into the measure last week. Council members agreed to delay a vote on paid time off until June 23.
The first increase in the city’s minimum wage, to $10.50 an hour, is scheduled for July 1, 2016. The wage will rise to $13.25 in July 2018 and $15 in July 2020. Businesses with fewer than 25 employees and some nonprofits will follow a modified schedule, with the first hike coming in 2017 and the final step to $15 coming in 2021.
Starting in 2022, annual increases in the minimum wage will be tied to a moving 20-year average in the national consumer price index.
It’s a less ambitious timeline than the one first proposed by Mayor Eric Garcetti last year. His proposal called for a $13.25 an hour minimum wage by 2017. But Garcetti came out with a statement supporting the move and thanking councilmembers Thursday.
Despite the stretched out timeline, Gary Toebben, chief executive of the Los Angeles Area Chamber of Commerce, said the wage hike will force many business owners to cut back on employees or hours.
“The Chamber was urging a longer phase-in so that small businesses would not be forced to cut employee hours or reduce the number of employees in order to offset the increase in the minimum wage,” he said. “We will be urging the City Council to monitor the impact on job creation as the increase is implemented.”
Councilmember Paul Krekorian, a long-time supporter of the hike, cited his own personal experience of watching his single mother, who waited tables, earn minimum wage.
“I get that if I were having that upbringing now it would be a lot harder to raise a family doing what she did,” Krekorian said, during the meeting. “Minimum wage has not kept up with the cost of living, the cost of housing, the cost of transportation.”
Councilmember Mitch Englander was the only member to vote against the wage hike. In a statement following the vote, Englander said he’s not convinced the wage hike would help workers but rather “have unintended consequences such as job loss, reduction in working hours, or make it impossible for entire industries to do business in the City of Los Angeles.”
Jot Condie, chief executive of California Restaurant Association, said the trade group is disappointed by Tuesday’s vote.
“Fifteen dollars an hour by 2020 is too much too soon for small businesses,” Condie said. “It will cost jobs in Los Angeles and could create very stark business climate differences between the region’s cities.”
Restaurant owners have been particularly vocal in their opposition to a wage hike, arguing that the increase will cause their costs to skyrocket. Restaurateurs have been pushing, unsuccessfully, to allow tips to count toward the minimum wage.
Also speaking against the wage hike Tuesday were several representatives from downtown L.A. gang intervention program Homeboy Industries. The nonprofit, which provides paid job training to former gang members, would have to lay off as many as 73 people in order to continue its programs. One Homeboy employee said it would be “devastating” to see fellow employees lose their job and risk resorting back to crime.
The Los Angeles County Federation of Business put out its annual survey Tuesday morning, and it said 35 percent of businesses in the city of Los Angeles would cut employees or hours if the minimum wage ordinance were passed. It also said 21 percent of businesses outside the city said the minimum wage ordinance would be good for them.
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