When a small group of activists in 2014 proposed a $15 per hour minimum wage, it seemed almost preposterous. But on Tuesday, Los Angeles, the state’s largest city and the nation’s second largest city, approved a plan to raise the city’s minimum to $15 per hour by 2020. They join a trend that is sweeping across the country.
The plan increases what is now a $9 an hour base wage up to $15 per hour by 2020. That will impact 800,000 workers. Los Angeles joins Chicago, San Francisco, and Seattle as major cities that have already approved similar increases.
“Make no mistake,” said Councilmember Paul Krekorian. “Today the city of Los Angeles, the second biggest city in the nation, is leading the nation.”
The vote was 14 to 1 with Mayor Eric Garcetti prepared to sign the wage increase into law. The first stage will increase wages to $10.50 by July 2016.
The LA Times called it: “The vote was the latest show of organized labor’s clout at City Hall. During nearly a year of often emotional debate, labor leaders never gave ground on their central demand that the minimum wage rise to at least $15.”
Maria Elena Durazo, former head of the Los Angeles County Federation of Labor, called it part of a national effort to alleviate poverty. “Without a doubt, it was a very big victory.”
Labor leaders were a bit frustrated with the gradual timeline, but, as the Times reports, “the harshest criticism of the law came from business groups, which warned lawmakers that the mandate would 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.
The Times noted that Mr. Gonzalez predicted that “many businesses would absorb their new labor costs by laying off employees, reducing work hours or moving out of the city entirely.”
“It’s simple math,” Mr. Gonzalez said. “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.”
The Sacramento Business Journal explored “How a $15 minimum wage in Los Angeles could impact Sacramento.”
It was earlier reported that the Sacramento City Council will investigate the issue in June. Mayor Kevin Johnson wishes to complete the city budget first, before taking up the issue of minimum wage.
The Business Journal quotes Josh Wood of the building advocacy, Region Builders, Inc., which “has begun organizing an opposition to the campaign to raise wages to $15. A wage floor at that size would hurt Sacramento in its efforts to compete economically with surrounding cities, as well as other regions of California, he said.”
He told the Business Journal, “If we decide to follow this route, we are taking away our competitive advantage against these areas and limiting economic growth.”
On the other hand, Tamie Dramer, director of the community group Organize Sacramento, “said the Los Angeles action came out of a recognition among residents and political leaders that $15 wage ‘is a real answer to very big problems that we have.’ She hopes to convince local lawmakers that $15 is the correct amount, and work with the city council to determine the appropriate phase-in timeline.”
“I’m hoping that people can understand that there are different pathways to $15 (per hour) and we are hoping to work with the mayor and city council to find the appropriate pathway for Sacramento to get to $15,” she said.
As the Vanguard reported in April, polling showed strong support for a wage hike to $13.50 an hour and even solid support for the $15 an hour that groups favor and cities like Seattle have already imposed.
The San Francisco polling firm, David Binder Research, found that in their survey of 500 Sacramento voters, “70 percent of Sacramento voters would support a measure to raise the city’s minimum wage to $13.50 an hour. And 58 percent of voters said they would approve raising Sacramento’s wage floor to $15 an hour over three years.”
With Los Angeles joining big cities like San Francisco and Oakland in a minimum wage hike, it makes it more likely that the state will act to further increase the statewide minimum wage.
The state came close last June to passing a $13 an hour minimum wage, only to have it die unexpectedly in the Assembly labor committee.
Senate Bill 935, authored by Senator Mark Leno, would have raised the minimum wage in three steps, starting at $11 an hour in 2015 and increasing an additional $1 per hour in both 2016 and 2017. Beginning in 2018, the minimum wage would be adjusted annually to the rate of inflation. SB 935 was co-sponsored by the Women’s Foundation of California and SEIU (Service Employees International Union) California State Council.
“Increasing the minimum wage is critically important to millions of hard-working Californians and their families who live in poverty and are forced to rely on the state’s social safety net programs despite being employed full time,” said Senator Leno, D-San Francisco who sponsored the legislation along with Assemblymember Luis Alejo. “By giving low-income workers the pay and respect they deserve, we will also address the growing inequality within our communities, which is a roadblock to economic recovery and a drain on already limited taxpayer resources.”
Last year there was an abortive local effort to increase Davis’ minimum wage to $15 an hour. However, those efforts were revived by outgoing executive secretary of the Sacramento Central Labor Council Bill Camp, who last December said that local labor leaders will ask voters in Sacramento and Davis to approve a minimum hourly wage of $15 in 2016.
—David M. Greenwald reporting