A Closer Look at the LA Minimum Wage Debate

According to a recent news article from the LA Times, eight months following Mayor Eric Garcetti’s proposal to raise the minimum wage in the City of Los Angeles, most major stakeholders have expressed their support in raising the minimum wage, or have at least chosen not to fight the inevitable. Now, the debate has shifted to the amount of a minimum wage increase that would be appropriate.

one-dollar-1380007-mIn addition to the amount of the worker base pay hike, city officials are looking at the duration of time over which an increase should be phased and whether some employers should be exempt from having to pay workers whatever new higher minimum wage is eventually passed into city law.

As our Los Angeles employment attorneys can explain, Los Angeles is not the first city in California to attempt to implement a citywide minimum wage. Cities such as Oakland, San Francisco, and San Jose have already taken the lead, as well as cities in other states across the country. Most of the cities in which there is a separate citywide minimum wage are cities with a very high cost of living. The already existing federal minimum and state minimum wages do not let lower wage earners make enough to support themselves and their families. This, in turn, affects other areas of the market when there is a problem filling large sectors of the employment market with qualified labor.

As suggested by the article’s author, the market actually suffers when workers are paid less, and this suffering takes many forms. Not only are the workers not able to make ends meet, they have less money to spend on consumer products, which has a negative impact on sales and services

With such astronomical housing costs in the Los Angeles area, it is estimated most low-wage workers cannot afford transportation, adequate housing, and healthcare. With people unable to afford to live in the Los Angeles area, it is hard to get people to spend money commuting to the area for the lowest paying jobs.

Since there is no question the minimum wage needs to be increased in our city, the question turns to what level of increase would be acceptable and would work in the mixed market economy. There are essentially three distinct proposals that aim to increase the minimum wage to as much as $15.25. The most aggressive proposal sets the city minimum wage at $15.25 for all employees by the year 2019.

For obvious reasons, many employers are not in favor of this proposal, as they believe it sets the rate too high and does so in too fast a time frame. They warn this will force many employers to lay off their workers, and some say it will even drive them out of business.

Others believe the mayor’s original proposal, which aimed to raise the city minimum wage to $13.25 an hour in 2017 followed by a series of automatic wage increase bringing the state minimum wage up to $15 by the year 2023, was appropriate. Obviously, there are those who feel this proposal does too little to help workers and it does it in too slow a manner.

Contact the employment attorneys at Nassiri Law Group, practicing in Orange County, Riverside and Los Angeles. Call 714-937-2020.

Additional Resources:

What minimum wage would be best for L.A.?, May 13, 2015, LA Times

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Adams v. CDM Media USA – Age Discrimination Lawsuit to Proceed, March 12, 2015, Costa Mesa Wage and Hour Lawyer Blog