Last week the Los Angeles City Council backed a plan that will provide wage increases for the city’s low-wage employees. The city’s new minimum wage will be raised to $15 per hour over the next few years.

Increasing Minimum Wage

Los Angeles is the latest city to join wage increases that are happening across the country as elected leaders seek to boost wages for workers at the lower rungs of the socio-economic ladder. Seattle, Chicago, and San Francisco have already approved increases for their lower income employees.

Lawmakers have announced plans to draft an ordinance that will raise the current $9-an-hour base wage to $15 by 2020, thus making L.A. the largest city in the nation to adopt a major minimum-wage hike for it’s 800,000 workers.

Councilman Paul Krekorian was instrumental in shaping the city’s plan. “Make no mistake,” he said. “Today the city of Los Angeles, the second biggest city in the nation, is leading the nation.”

Voting for Wage Increases

The council’s vote followed years of nationwide public debate and protest along with months of back-room lobbying. After a 14 to 1 vote, the council instructed City Atty. Mike Feuer to prepare an ordinance that will carry out the wage increases. While a final vote on the measure will still need to be taken next month, Mayor Eric Garcetti has already agreed to sign the wage increase into law. This means the first wage boost of $10.50 an hour will go into effect in July 2016. While some argue this is too long to wait, it does not take away from the fact that the increase will now, finally happen.

The Fight for Wage Increases

The fight for wage increases has picked up over the last year, with protests happening around the country. This vote was the latest display of organized labor’s clout when it comes to taking on City Hall. After a year of often emotional debate, during with labor leaders never backed down on getting the $15 wage, the City Council has ultimately favored this ruling over Mayor Garcetti’s proposal to raise the minimum wage to $13.25 by 2017.

According to Maria Elena Durazo, former head of the Los Angeles County Federation of Labor, this decision is part of a broader national effort to alleviate poverty. According to her, raising the minimum wage in L.A. will help spur similar wage increases across the country. Durazo currently works with Unite Here, the hotel and restaurant workers’ union. “Without a doubt, it was a very big victory,” she said.

Criticisms

Though some labor leaders have expressed dissatisfaction with the gradual timeline that has been set for the wage increases, the harshest criticism of the ruling comes from business groups. They fear the mandate for increased wages will force employers to lay off workers or leave the city altogether.

“The very people [council members’] rhetoric claims to help with this action, it’s going to hurt,” said Ruben Gonzalez, the Los Angeles Area Chamber of Commerce’s senior vice president for public policy and political affairs.

He’s predicting that many L.A. businesses will need lay of employees, reduce work hours, or move out of the city entirely as a way to absorb these new labor costs. He claims, “It’s simple math. There is simply not enough room, enough margin in these businesses to absorb a 50-plus percent increase in labor costs over a short period of time.”

According to Councilman Mitchell Englander,who represents the northwest San Fernando Valley and is the council’s only Republican, the ruling could “make it impossible for entire industries to do business” in L.A. He cast the lone opposing vote.

“The very last thing that we should be doing as a city is creating a competitive disadvantage for our businesses with those in neighboring cities,” said Englander.

Huge Changes

The wage increase is set to directly affect workers and businesses throughout Los Angeles.

“That’s a monumental change in wages,” said Jerry Newman, a professor at the State University of New York at Buffalo School of Management. “It’s going to have both an economic impact and a social impact.”

For workers like Juan Moran, a line cook who works in Little Tokyo and lives in Boyle Heights, the impact will be huge. Moran addressed the council, saying the current statewide minimum wage of $9 per hour is not enough to live on.

“Sometimes I have to walk half an hour from work to get to my apartment because money’s not enough to pay a ride on the bus,” he said. “Or I work 12 hours straight without stop … just to pay rent.”

Across the Nation

The federal minimum wage is now at the forefront of the Democratic Party’s agenda as the party seeks to revive the focus on income inequality. Once Los Angeles’ wage increase is finalized, the city will become the third West Coast city that will have enacted higher minimum wages in the last two years, following Seattle and San Francisco. New York City and Washington, D.C., are weighing similar $15-an-hour minimum wage proposals.

It’s fitting that L.A. would take such a large step, according to Jaime Regalado, emeritus professor of political science at Cal State L.A. According to him, this move fits in with California’s typical left-leaning policies such as those that regulate greenhouse-gas emissions.

The state “has been out front on a variety of things that are not as rapidly moving nationally,” Regalado said.
This proposed wage increase, he said, is “consistent with what we’ve seen as California has grown increasingly blue, especially urban centers like Los Angeles.”

Hotel Workers Lead the Way

The movement for higher wages gained momentum when a measure to raise the base pay for workers at the city’s large hotels to $15.37 per hour passed last fall.

Newly elected council members from across the city led that push: Mike Bonin from an affluent coastal district, Curren Price from South Los Angeles, and Nury Martinez from the San Fernando Valley. Their support and work during that proposal was a precursor to the citywide minimum wage hike proposal.

Mayor Gargetti was a key advocate as well. Last summer Garcetti put forth his own proposal to raise base wages to $13.25 an hour. The mayor praised the newly passed measure, saying, “I’ve been smiling from ear to ear all day long. This is a big day for L.A. I think it’s an important day for this country.”

The Plan

The approved council plan would raise wages higher than the mayor’s proposal of $13.25, albeit more gradually. By 2020 all low wage employees should be receiving $15 an hour. Businesses and nonprofit groups that employ 25 or fewer workers will have until 2021 to comply. This is an extra year. This extension might also be extended to nonprofits that train and rehabilitate disadvantaged workers, such as the homeless or former gang members.

After 2020, yearly wage increases will adjust according to the consumer price index. This is a key provision of the law that supporters believe addresses the issue of past failures that did not adjust the minimum wage for inflation. Opponents to the increases feel this provision will be a further hit to businesses.

Haggling continued over the proposal’s fine print until the last minute. The week prior to the finalization writers still were debating a controversial provision that would have forced employers to grant workers up to a dozen days of paid time off each year. In the end, that provision was separated from the wage increase debate for further study.

While city lawmakers congratulated themselves on this plan, some council members are still wary of the results and feel effects of the plan aren’t easy to predict.

“This is an experiment,” Councilman Paul Koretz said. “If anyone tells you they know exactly how this is going to go … they’re not being honest with you.”

Council member Bonin, an early champion of the pay increase, acknowledged that same uncertainty but still feels the council made the right choice.

“Those concerns about potential unintended consequences are also balanced against the very real and known consequences we have and we see in Los Angeles every day of people getting a poverty wage for working full time,” he said.

Working with an Employment Law Attorney

If you feel you have been treated unfairly by an employer you should immediately contact an employment law attorney. Federal and state employment laws provide directives for the workplace that protect employees who have experienced discrimination and other adverse actions. Whether you are an employee who has been wrongfully terminated or are an employer requiring guidance with a legal matter, our Los Angeles employment law attorneys can assist you.