Los Angeles Lifts Its Minimum Wage to $15 Per Hour
By JENNIFER MEDINA and NOAM SCHEIBER
New York Times
MAY 19, 2015
LOS ANGELES — The nation’s second-largest city voted Tuesday to increase its minimum wage from $9 an hour to $15 an hour by 2020, in what is perhaps the most significant victory so far for labor groups and their allies who are engaged in a national push to raise the minimum wage.
The increase, which the City Council passed in a 14-to-1 vote, comes as workers across the country are rallying for higher wages and several large companies, including Facebook and Walmart, have moved to raise their lowest wages. Several other cities, including San Francisco, Chicago, Seattle and Oakland, Calif., have already approved increases, and dozens more are considering doing the same. In 2014, a number of Republican-leaning states like Alaska and South Dakota also raised their state-level minimum wages by ballot initiative.
The effect is likely to be particularly strong in Los Angeles, where, according to some estimates, almost 50 percent of the city’s work force earns less than $15 an hour. Under the plan approved Tuesday, the minimum wage will rise over five years.
“The effects here will be the biggest by far,” said Michael Reich, an economist at the University of California, Berkeley, who was commissioned by city leaders to conduct several studies on the potential effects of a minimum-wage increase. “The proposal will bring wages up in a way we haven’t seen since the 1960s. There’s a sense spreading that this is the new norm, especially in areas that have high costs of housing.”
The groups pressing for higher minimum wages said that the Los Angeles vote could set off a wave of increases across Southern California, and that higher pay scales would improve the way of life for the region’s vast low-wage work force.
Supporters of higher wages say they hope the move will reverberate nationally. Gov. Andrew M. Cuomo of New York announced this month that he was convening a state board to consider a wage increase in the local fast-food industry, which could be enacted without a vote in the State Legislature. Immediately after the Los Angeles vote, pressure began to build on Mr. Cuomo to reject an increase that falls short of $15 an hour.
“The L.A. increase nudges it forward,” said Dan Cantor, the national director of the Working Families Party, which was founded in New York and has helped pass progressive economic measures in several states. “It puts an exclamation point on the need for $15 to be where the wage board ends up.”
The current minimum wage in New York State is $8.75, versus a federal minimum wage of $7.25, and will rise to $9 at the end of 2015. A little more than one-third of workers citywide and statewide now make below $15 an hour.
Los Angeles County is also considering a measure that would lift the wages of thousands of workers in unincorporated parts of the county.
Much of the debate here has centered on potential regional repercussions. Many of the low-wage workers who form the backbone of Southern California’s economy live in the suburbs of Los Angeles. Proponents of the wage increase say they expect that several nearby cities, including Santa Monica, West Hollywood and Pasadena, will also approve higher wages.
But opponents of higher minimum wages, including small-business owners and the Los Angeles Chamber of Commerce, say the increase approved Tuesday could turn Los Angeles into a “wage island,” pushing businesses to nearby places where they can pay employees less.
“They are asking businesses to foot the bill on a social experiment that they would never do on their own employees,” said Stuart Waldman, the president of the Valley Industry and Commerce Association, a trade group that represents companies and other organizations in Southern California. “A lot of businesses aren’t going to make it,” he added. “It’s great that this is an increase for some employees, but the sad truth is that a lot of employees are going to lose their jobs.”
The 67 percent increase from the current state minimum will be phased in over five years, first to $10.50 in July 2016, then to $12 in 2017, $13.25 in 2018 and $14.25 in 2019. Businesses with fewer than 25 employees will have an extra year to carry out the plan. Starting in 2022, annual increases will be based on the Consumer Price Index average of the last 20 years. The City Council’s vote will instruct the city attorney to draft the language of the law, which will then come back to the Council for final approval.
The mayor of Los Angeles, Eric Garcetti, a Democrat, had proposed a slightly different increase last fall and later negotiated the details with the Democratic-controlled Council. Mr. Garcetti said Tuesday that he would sign the legislation and that he hoped other elected officials, including Mr. Cuomo, would follow Los Angeles’s path.
“We’re leading the country; we’re not going to wait for Washington to lift Americans out of poverty,” Mr. Garcetti said in an interview. “We have too many adults struggling to be living off a poverty wage. This will re-establish some of the equilibrium we’ve had in the past.”
New York City does not have a separate minimum wage, but Mayor Bill de Blasio has spoken out in favor of higher wages statewide. “Los Angeles is another example of a city that’s doing the right thing, lifting people up by providing a wage on which they can live,” Mr. de Blasio said in a statement “We need Albany to catch up with the times and raise the wage.”
The push for a $15-an-hour minimum wage is not confined to populous coastal states. In Kansas City, Mo., activists recently collected enough signatures to put forward an August ballot initiative on whether to raise the minimum wage to $15 by 2020. The City Council is deliberating this week over how to respond and could pass its own measure in advance of the initiative.
As the Los Angeles City Council considered raising the minimum wage over the last several months, the question was not if, but how much. The lone councilman who voted against the bill — a Republican — did not speak during Tuesday’s meeting.
Still, for all their enthusiasm, some Council members acknowledged that it would be difficult to predict what would happen once the increase was fully in effect.
“I would prefer that the cost of this was really burdened by those at the highest income levels,” said Gil Cedillo, a councilman who represents some of the poorest sections of the city and worries that some small businesses will shut down. “Instead, it’s going to be coming from people who are just a rung or two up the ladder here. It’s a risk that rhetoric can’t resolve.”
Even economists who support increasing the minimum wage say there is not enough historical data to predict the effect of a $15 minimum wage, an unprecedented increase. A wage increase to $12 an hour over the next few years would achieve about the same purchasing power as the minimum wage in the late 1960s, the most recent peak.
Many restaurant owners here aggressively fought the increase, saying they would be forced to cut as much as half of their staff. Unlike other states, California state law prohibits tipped employees from receiving lower than the minimum wage. The Council promised to study the potential effect of allowing restaurants to add a service charge to bills to meet the increased costs.
And while labor leaders and the coalition of dozens of community groups celebrated in the rotunda of City Hall after the vote, they acknowledged there was a long way to go.
“This says to Los Angeles workers that they are respected, and that’s an important psychological effect,” said Laphonza Butler, the president of Service Employees International Union-United Long Term Care Workers here and a leader of the coalition. “To know that they have a pathway to $15, to getting themselves off of welfare and out of poverty, that’s huge. This should change the debate of the value of low-wage work.”
Jennifer Medina reported from Los Angeles, and Noam Scheiber from Washington.
New York Times
MAY 19, 2015
LOS ANGELES — The nation’s second-largest city voted Tuesday to increase its minimum wage from $9 an hour to $15 an hour by 2020, in what is perhaps the most significant victory so far for labor groups and their allies who are engaged in a national push to raise the minimum wage.
The increase, which the City Council passed in a 14-to-1 vote, comes as workers across the country are rallying for higher wages and several large companies, including Facebook and Walmart, have moved to raise their lowest wages. Several other cities, including San Francisco, Chicago, Seattle and Oakland, Calif., have already approved increases, and dozens more are considering doing the same. In 2014, a number of Republican-leaning states like Alaska and South Dakota also raised their state-level minimum wages by ballot initiative.
The effect is likely to be particularly strong in Los Angeles, where, according to some estimates, almost 50 percent of the city’s work force earns less than $15 an hour. Under the plan approved Tuesday, the minimum wage will rise over five years.
“The effects here will be the biggest by far,” said Michael Reich, an economist at the University of California, Berkeley, who was commissioned by city leaders to conduct several studies on the potential effects of a minimum-wage increase. “The proposal will bring wages up in a way we haven’t seen since the 1960s. There’s a sense spreading that this is the new norm, especially in areas that have high costs of housing.”
The groups pressing for higher minimum wages said that the Los Angeles vote could set off a wave of increases across Southern California, and that higher pay scales would improve the way of life for the region’s vast low-wage work force.
Supporters of higher wages say they hope the move will reverberate nationally. Gov. Andrew M. Cuomo of New York announced this month that he was convening a state board to consider a wage increase in the local fast-food industry, which could be enacted without a vote in the State Legislature. Immediately after the Los Angeles vote, pressure began to build on Mr. Cuomo to reject an increase that falls short of $15 an hour.
“The L.A. increase nudges it forward,” said Dan Cantor, the national director of the Working Families Party, which was founded in New York and has helped pass progressive economic measures in several states. “It puts an exclamation point on the need for $15 to be where the wage board ends up.”
The current minimum wage in New York State is $8.75, versus a federal minimum wage of $7.25, and will rise to $9 at the end of 2015. A little more than one-third of workers citywide and statewide now make below $15 an hour.
Los Angeles County is also considering a measure that would lift the wages of thousands of workers in unincorporated parts of the county.
Much of the debate here has centered on potential regional repercussions. Many of the low-wage workers who form the backbone of Southern California’s economy live in the suburbs of Los Angeles. Proponents of the wage increase say they expect that several nearby cities, including Santa Monica, West Hollywood and Pasadena, will also approve higher wages.
But opponents of higher minimum wages, including small-business owners and the Los Angeles Chamber of Commerce, say the increase approved Tuesday could turn Los Angeles into a “wage island,” pushing businesses to nearby places where they can pay employees less.
“They are asking businesses to foot the bill on a social experiment that they would never do on their own employees,” said Stuart Waldman, the president of the Valley Industry and Commerce Association, a trade group that represents companies and other organizations in Southern California. “A lot of businesses aren’t going to make it,” he added. “It’s great that this is an increase for some employees, but the sad truth is that a lot of employees are going to lose their jobs.”
The 67 percent increase from the current state minimum will be phased in over five years, first to $10.50 in July 2016, then to $12 in 2017, $13.25 in 2018 and $14.25 in 2019. Businesses with fewer than 25 employees will have an extra year to carry out the plan. Starting in 2022, annual increases will be based on the Consumer Price Index average of the last 20 years. The City Council’s vote will instruct the city attorney to draft the language of the law, which will then come back to the Council for final approval.
The mayor of Los Angeles, Eric Garcetti, a Democrat, had proposed a slightly different increase last fall and later negotiated the details with the Democratic-controlled Council. Mr. Garcetti said Tuesday that he would sign the legislation and that he hoped other elected officials, including Mr. Cuomo, would follow Los Angeles’s path.
“We’re leading the country; we’re not going to wait for Washington to lift Americans out of poverty,” Mr. Garcetti said in an interview. “We have too many adults struggling to be living off a poverty wage. This will re-establish some of the equilibrium we’ve had in the past.”
New York City does not have a separate minimum wage, but Mayor Bill de Blasio has spoken out in favor of higher wages statewide. “Los Angeles is another example of a city that’s doing the right thing, lifting people up by providing a wage on which they can live,” Mr. de Blasio said in a statement “We need Albany to catch up with the times and raise the wage.”
The push for a $15-an-hour minimum wage is not confined to populous coastal states. In Kansas City, Mo., activists recently collected enough signatures to put forward an August ballot initiative on whether to raise the minimum wage to $15 by 2020. The City Council is deliberating this week over how to respond and could pass its own measure in advance of the initiative.
As the Los Angeles City Council considered raising the minimum wage over the last several months, the question was not if, but how much. The lone councilman who voted against the bill — a Republican — did not speak during Tuesday’s meeting.
Still, for all their enthusiasm, some Council members acknowledged that it would be difficult to predict what would happen once the increase was fully in effect.
“I would prefer that the cost of this was really burdened by those at the highest income levels,” said Gil Cedillo, a councilman who represents some of the poorest sections of the city and worries that some small businesses will shut down. “Instead, it’s going to be coming from people who are just a rung or two up the ladder here. It’s a risk that rhetoric can’t resolve.”
Even economists who support increasing the minimum wage say there is not enough historical data to predict the effect of a $15 minimum wage, an unprecedented increase. A wage increase to $12 an hour over the next few years would achieve about the same purchasing power as the minimum wage in the late 1960s, the most recent peak.
Many restaurant owners here aggressively fought the increase, saying they would be forced to cut as much as half of their staff. Unlike other states, California state law prohibits tipped employees from receiving lower than the minimum wage. The Council promised to study the potential effect of allowing restaurants to add a service charge to bills to meet the increased costs.
And while labor leaders and the coalition of dozens of community groups celebrated in the rotunda of City Hall after the vote, they acknowledged there was a long way to go.
“This says to Los Angeles workers that they are respected, and that’s an important psychological effect,” said Laphonza Butler, the president of Service Employees International Union-United Long Term Care Workers here and a leader of the coalition. “To know that they have a pathway to $15, to getting themselves off of welfare and out of poverty, that’s huge. This should change the debate of the value of low-wage work.”
Jennifer Medina reported from Los Angeles, and Noam Scheiber from Washington.
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