This is a fact: you cannot meet necessary living expenses on $9 per hour, the current minimum wage in Los Angeles.
This past Labor Day, the holiday that pays tribute to the labor movement that achieved social and economic improvements for workers and their families, Mayor Eric Garcetti announced a plan to raise the city’s minimum wage to $13.25 per hour over the next three years.
This board supports Garcetti’s plan. We support it because the plan effectively allows workers to earn enough for necessary living expenses and reasonably shifts the cost of wage labor from taxpayers to employers. We believe Garcetti’s proposal is a practical way of fighting poverty and promoting widespread equity at the local level by tailoring local costs, particularly in light of the high cost of living in Los Angeles.
For instance, a recent study published by the UCLA Luskin School of Public Affairs found that Los Angeles is the least affordable rental market in the country. Because the median income in Los Angeles is lower, a much higher proportion of workers’ incomes is required to pay rent, according to the report.
Students in particular often have to incur significant debt in student loans while being unable to make a substantial dent in their payments because of low-wage earnings on the current minimum wage.
Several business leaders had expressed concerns that such a raise in the minimum wage would reduce employment and force businesses to move elsewhere. But this particular anxiety is overstated. Several studies on similar wage increases in other cities have found businesses were able to raise wages without hurting employment.
For example, a 2011 study by the Center for Economic and Policy Research found that local minimum wage hikes in San Francisco, Santa Fe and Washington, D.C., boosted wages for low-income workers without a significant impact on employment trends.
In another study from University of California, Berkeley, researchers examined the impact of San Francisco’s minimum wage and related compensation laws that placed workers’ compensations at 80 percent above the federal minimum wage level. Researchers found that employment rates in the private sector in San Francisco grew while other Bay Area counties that did not have a higher local minimum wage suffered a decrease in private sector employment.
A similar proposal by a coalition of activists in Los Angeles would immediately increase the minimum wage to $15 an hour for large businesses, but this board believes Garcetti’s plan of incremental increases is more practical and likely to pass. It gives businesses time to adjust their costs and plan accordingly while garnering wider support for the increase.
Garcetti’s proposal would also increase the minimum wage annually after reaching $13.25 in 2017 by tying it to rises in inflation, with the goal of reaching $15 by 2020 or 2021 – a goal this board feels is admirable and feasible.