Push To Increase Minimum Wage on LA City Council Table

A push, backed by Los Angeles Mayor Eric Garcetti and a majority of Los Angeles County supervisors, to increase the minimum wage in Los Angeles will be considered during a committee hearing Tuesday.

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Officials from Los Angeles along with members from the California Restaurant Association and industry representatives will discuss the pros and cons of increasing the current $9 an hour minimum wage steadily to $13.25 an hour by 2017 and $15.25 an hour by 2019.

"We all want better lives, better quality of life, better wages, a stronger economy for everybody in Los Angeles, what we’re really arguing is how," Ruben Gonzalez said, a member of the Los Angeles Area Chamber of Commerce who is against the wage hike.

A UC Berkeley report commissioned by the city of Los Angeles and released last week showed that raising the minimum wage in LA would have more benefits than drawbacks. Two other reports commissioned by business and labor groups with conflicting conclusions would also be considered during the LA council’s Economic Development Committee discussions.

"Well I think the only study is the one that a bunch of council members are going to do when they really sit down and listen and look at all the issues," Bill Chait said, a prominent restauranter in LA. "I think that Los Angeles has a unique sorta condition and politically in terms with how the council interacts with the mayor and I think it hopefully will foster really good dialogue to come up with the best situation."

Chait, who is behind some of LA’s favorite restaurants including Republique, Bestia and Redbird, said he is partly for the proposal.

"We don’t think it’s a lose, we think it’s an issue that had to be addressed and we think that there’s been a real need to raise non-tipped employee compensation for a while," he said.

On the other side of the argument, opponents feared a wage hike would hurt LA.

"The only way to absorb those costs is to cut jobs, cut hours for workers, move, move your shop or close your doors,” Gonzalez said.

The UC Berkeley report also found that a wage increase likely would prompt businesses to pass costs onto customers, driving demand down by $1.128 billion by 2019. Concurrently, the incomes for workers would go up $2.381 billion by 2019 and likely have multiplier effects on spending in the economy, the report said.

It also noted that wages for about 600,000 workers would be affected. Half of those workers lived outside the city and their spending would happen where they lived, not in LA. This in turn would lower the gross domestic product in LA by 0.1 percent, which translated to the loss of 3,472 jobs by 2019.

Tuesday’s meeting is the first in a series of four meetings scheduled through the end of March and beginning of April held by the council’s Economic Development Committee to discuss the results of the trio of studies.

City News Service contributed to the report.