Los Angeles City Council passed legislation today that will gradually raise the minimum wage in the city to $15 an hour by 2020 for hundreds of thousands of workers.
The council voted 12-1 to approve the wage hike, with Councilman Mitchell Englander dissenting. This second, procedural vote was necessary because the first vote was not unanimous, with, again, Councilman Englander opposed.
The ordinance will now go to Los Angeles Mayor Eric Garcetti’s office for his approval, which it will likely get.
The law will make Los Angeles the largest city to pass legislation that addresses the overwhelming wealth gap in the United States, an issue that has seen numerous demonstrations over recent years such as the Occupy Wall Street movement. It’s also likely to be a primary concern of presidential hopefuls as their campaigns unfold.
However, the jury is still out on whether or not the raise will truly help those struggling to make ends meet.
Uncertainty remains over how the wage boost will affect the Los Angeles economy. Three different studies, one sought by labor, one by the Los Angeles Area Chamber of Commerce, and one by the city of Los Angeles, drew different conclusions about its economic effects.
“A livable wage will help to sustain individuals and families and support economic stability and advancement,” said Susan Bursk, President and CEO of the Century City Chamber of Commerce. “But it may also have unintended impacts, especially on small business, which may not be able to afford as many employees. The true effects may not be measured until the law is fully implemented and results can be analyzed.”
Labor and community activist claim that higher wages will stimulate the economy and will better allow wage earners to support their families, arguing that wages are not currently keeping up with the cost of living.
But business groups warn that the new law could hurt workers as employers cut jobs to compensate for the higher wages, especially in the restaurant industry.
“We are disappointed in the extreme minimum wage increase approved by the Los Angeles City Council to raise the minimum wage to $15 an hour by 2020. The increase is an almost 50 percent increase over five years, putting local businesses at a competitive disadvantage to their neighbors,” said Jot Condie, President and CEO of the California Restaurant Association. “This action will cost many working families their jobs, increase prices for consumers, and lead to the closure of small businesses.”
Under the ordinance, the city minimum wage would increase to $10.50 per hour in July 2016 for businesses with 26 or more employees, with a one-year delay for smaller businesses.
The wage would then go up to $12 an hour by July 2017, $13.25 per hour by July 2018, $14.25 per hour by July 2019, and finally to $15 by July 2020.
Businesses with 25 or fewer employees would start raising their wages one year later and have until 2021 to reach $15 an hour.
Once the wage reaches $15 per hour for both small and large employers, the minimum wage will continue to increase based on the cost of living.
The city will be closely monitoring the law and will be making amendments accordingly, especially on these more controversial issues like whether unionized companies should be allowed to negotiate for a sub-minimum wage with their employees.
The Los Angeles County Federation of Labor sought to add that provision to the ordinance in the final days of the debate, saying that it would help avert legal challenges and allow union workers to trade pay increases for other benefits as they saw fit, according to the Los Angeles Times.
This has drawn sharp criticism with some claiming that such a law will promote workers to unionize.
However, particulars aside, many people believe that it is a “moral obligation to offer a fair wage,” said Donna Lasman, Executive Director of the Venice Chamber of Commerce.
L.A. Councilman Mike Bonin, who represents Brentwood, Venice, and other parts of the Westside, said that the higher wage will address “a cancer in the city of Los Angeles called poverty.”
For business owners like Carl Lambert, owner of the Venice Breeze Hotel, the minimum wage increase won’t be an issue.
He has already been paying his employees at least $15 an hour and “even [his] house keepers have retirement plans.”
“Right now they’re making about $15 an hour,” he said, referring to the workers he employees at the Venice Breeze Hotel. “But I am more of the exception than the rule.”
The new law passed by Los Angeles City Council will now force others to be like Lambert, making $15 an hour the rule instead of the exception.