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Los Angeles Mayor Considers a $13.25 Minimum Wage


Protesters demonstrate outside a fast-food restaurant in Los Angeles on Aug. 29, 2013

Photograph by Nick Ut/AP Photo

Protesters demonstrate outside a fast-food restaurant in Los Angeles on Aug. 29, 2013

California is beautiful, diverse, and expensive, so perhaps it shouldn’t be surprising that the state is emerging at the forefront of raising worker pay. Now, Los Angeles, the state’s largest city—the second-biggest in the country—may take on a major pay hike of its own.

The Los Angeles Times reports that Los Angeles Mayor Eric Garcetti is circulating a proposal to raise the citywide minimum wage to $13.25 by 2017, after which it would be pegged to inflation. The paper reports that the mayor may announce the plan on Labor Day. If the city’s proposal passes, Los Angeles would join California’s other large cities, which have also pursued pay raises on their own.

San Francisco became the first municipality in the country to implement a citywide floor on wages when it increased pay to $8.50 an hour in 2003. The housing boom and subsequent bust diverted the state’s attention, but concerns about growing inequality have made wages a hot issue again. In 2012, San Jose increased the minimum to $10 an hour, indexed to inflation, and in 2013 the state legislature approved an increase to $9 this July and $10 in January 2016.

The relative early success of San Jose’s raise, which went into effect in 2013, has provided fuel for advocates who want other cities to follow suit. Last month, San Diego raised pay to $13.50, and in November voters in San Francisco will decide whether to increase pay again, to $15 an hour by July 2018. A new study (PDF) from the University of California, Berkeley estimates this higher minimum would give raises to almost a quarter of employees in the city.

Each change or proposal uses slightly different features designed to ease the pressure on businesses. The San Francisco ballot measure, for example, gives employers with fewer than 100 workers more time to increase pay. In Los Angeles the increase is phased in over the next two years. (None of the plans in California are quite as elaborate as the compromise labor and business struck in Seattle.)

Easing in the pay raises may not be enough to placate all businesses, and Los Angeles would be wise to learn from its neighbors. The San Jose law has gone into effect with minimal blowback, thanks in part to the booming Bay Area economy, and the Seattle agreement was the result of direct negotiations between business and labor. In San Diego, however, the business community, with support from national trade associations, is pushing a voter referendum to repeal the pay increase. While Los Angeles isn’t traditionally as conservative as San Diego, it’s a much larger city, which makes it a bigger target for a fight.

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Weise is a reporter for Bloomberg Businessweek in New York. Follow her on Twitter @kyweise.

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