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Los Angeles Mayor Urges Neighbors to Adopt Minimum Wage Increase

Los Angeles Mayor Urges Neighbors to Adopt Minimum Wage Increase

The federal minimum wage is $7.25 per hour and hasn’t seen an increase since July of 2009. California, apparently valuing its workers a little more than the federal government has set the state’s minimum wage at $9.00 per hour with an increase to $10.00 an hour due over the next year.

But Los Angeles Mayor Eric Garcetti doesn’t feel that this goes far enough. He just pitched his plan to gradually boost the minimum wage across the city, meeting an outcry from critics stating that businesses might move to nearby cities to pay workers less.

Rather than back down to the critics’ seemingly valid argument, Garcetti is instead going on the offensive and asking the surrounding cities to mirror his increase to $13.25 per hour. He has met with mixed results.

Santa Monica Mayor, Pam O’Connell met with Garcetti in a private meeting and placed the item on the agenda for the recent council meeting. She believes an increase is the right thing to do, but the council decided to monitor the situation in Los Angeles and give staff time to analyze what an increase in LA would mean to the Santa Monica economy.

Councilmember Gleam Davis said, “However you want to characterize it, we are either embraced or imprisoned by the city of Los Angeles, and so obviously any change in the minimum wage to our neighbor in the north, east and south would create an opportunity perhaps for us to raise our minimum wage as well; simply because there wouldn’t be any disadvantage to businesses in the city of Santa Monica,” Davis said.

She added, “This is not making a decision … it is simply asking staff to continue to monitor the situation in the city of Los Angeles, and if in fact something does happen in Los Angeles, to analyze what effect that might have on our Santa Monica economy, and put a discussion regarding that on our agenda at that time.”

In West Hollywood, council members voted last week to gather information about wages in their city, the first step toward deciding whether to impose a city minimum wage, which has not been done, to date.

Garcetti would like to gradually increase the minimum wage across the city over the course of the next 3 years, going from the California state minimum of $9 an hour to at least $10.25 in 2015, $11.75 in 2016 and $13.25 in 2017. If neighboring cities join in, it could ease worries that L.A. may lose jobs. Garcetti promoted the plan Friday at a meeting with mayors representing cities from Lancaster to Long Beach.

“We are stronger as a region,” Garcetti told dozens of officials gathered at the Monterey Park library. “While we will always have some friendly rivalries, we should get past the days of, ‘Oh, don’t go to Long Beach, come to L.A.,’ or ‘Don’t go to L.A., go to Long Beach.'”

While there may in fact be pushback from businesses, many of the mayors gathered at the meeting were more realistic in terms of the necessity for a higher living wage. Culver City Mayor Meghan Sahli-Wells said she was interested in helping families handle steep rents in her city. Pasadena Mayor Bill Bogaard said the minimum wage was a logical topic for regional consideration and cooperation. “We know what the push-back is going to be” from businesses, said Bell Mayor Nestor Enrique Valencia, who said he personally backed the idea of boosting the minimum wage. “But the working-class people aren’t making it now.”

Leaders from several cities, including Glendale, Vernon and Long Beach, said they had yet to consider the idea. Huntington Park, a blue-collar city southeast of L.A., has focused on bolstering small businesses, not wages, in the wake of the recession, said public information officer Michael Chee.

And in the South Bay city of El Segundo, Mayor Suzanne Fuentes said she doubted a minimum-wage hike will get much traction with her city’s council members.

“The city of El Segundo is very business-friendly. That’s something we pride ourselves on,” Fuentes said. “I don’t want to tell a business what they have to pay an employee – the market will determine what the wages are.”

Business groups leery of the proposed boost say that if neighboring jurisdictions join Los Angeles, that could alleviate some of their concerns. But even if a number of Los Angeles County cities go along, “you still have the competitive disadvantage of L.A. versus Orange County or Ventura, or other cities in California,” said Carol Schatz, chief executive of the Central City Association., which represents downtown businesses. “And there are many other concerns with this.”

The Central City Association wants Garcetti to re-visit his timeline for proposed wage hikes, slowing it down and giving businesses more time to adjust. They’d also like to see other concessions, like a lower wage for teenage workers. Adding things like health care benefits, pensions and other benefits to the definition of total wages is also something they’re asking him to look at. It also wants the city to lobby for changes in state law to permit tips to be counted toward minimum pay. Without such changes, the group argues, local businesses will struggle to cope with the increase.

The specter of ‘job flight’ was one that was mentioned repeatedly. Defined as the movement of businesses away from areas that are seen as less business friendly, to other areas, taking jobs with them, the threat is a real one. However, many minimum wage jobs are in retail or fast food restaurants, which are more likely to choose their locations to draw customers than to find cheap labor, said Chris Tilly, director of the UCLA Institute for Research on Labor and Employment. A UC Berkeley study commissioned by Garcetti found that the proposed wage boost was unlikely to have a significant overall effect on employment.

That study did caution however, that some jobs in apparel manufacturing could relocate to nearby cities. The apparel industry has warned that a boost in the minimum wage would give factories in nearby cities an advantage over Los Angeles manufacturers, nudging them to move away. And it’s not like the apparel industry has a great track record of going out of its way to provide livable wages to its employees.

Ilse Metchek, president of the California Fashion Association warned, “It’s 10 blocks to Vernon, another 10 blocks to El Monte, El Segundo, the City of Commerce. They could very easily move.”

Of course that threat could sway other surrounding cities, particularly those that compete with Los Angeles for manufacturing jobs, as they weigh whether to follow Garcetti in boosting wages.

For Santa Monica “attracting apparel jobs is really not a consideration,” Tilly said. “For the City of Commerce, it might well be.”