Los Angeles City Council approves landmark minimum wage increase

LOS ANGELES — Moving to the forefront of a national campaign to boost the incomes of low-wage workers, Los Angeles lawmakers voted Wednesday to approve an ordinance hiking the citywide minimum wage to at least $15 an hour by 2020.

With the Wednesday action, which requires one more procedural vote by the City Council and the mayor’s signature, LA is slated to become the largest city in the nation mandating higher wages and joins Seattle, San Francisco and other municipalities that have adopted similar laws. The vote was 13-1, with Councilman Mitch Englander casting the sole vote in opposition and Councilman Bernard C. Parks absent.

Councilman Mike Bonin called the wage hike “probably the single biggest thing we will ever do to positively impact the lives of the people in Los Angeles.”

“Today we’re going to say that we’re a city that doesn’t tolerate poverty,” he said. “Today we’re going to show that we’re a city that really, really sincerely believes in economic and social justice.”

But many thorny issues remain, such as whether the ordinance should be amended to exempt unionized businesses that reach agreements with their workers to accept a lower wage, whether employers should be required to grant more paid sick days, whether restaurants should be restricted in using “service charges” to deal with added costs, and whether groups that help the disadvantaged transition into the workforce should be given special consideration.

Several council members asked city officials to report back on whether it was feasible to exempt businesses with 50 employees or fewer if they provide benefits to their workers that equal or exceed the minimum wage requirements, a new tack in the long-running debate.

The council decided to continue studying and debating those sensitive issues, with an eye toward making any agreed-upon additions before the law goes into effect. The first city-mandated wage increases would take effect in July of next year.

The LA plan could encourage nearby cities to enact similar minimum wage laws. The Los Angeles County Board of Supervisors also is expected to consider minimum wage legislation for unincorporated areas.

“My own personal hope is that the county will closely follow the city,” County Supervisor Sheila Kuehl said Tuesday, adding that the county might choose a different timeline for implementation.

The local plans could be at least partly overtaken by a state proposal to increase the California minimum wage. That measure would raise pay to $13 hourly by the middle of 2017 — a year earlier than anticipated under the LA minimum wage ordinance — with future increases tied to inflation.

Wages could also rise statewide if the SEIU-United Healthcare Workers West union succeeds in getting voters to back a ballot initiative increasing the California minimum wage to $15 an hour by 2021.

Passing the LA wage hikes “absolutely helps” the chances of that proposed ballot measure, said SEIU-UHW President Dave Regan. “It demonstrates to people that this is an achievable goal.”

City Council President Herb Wesson said the LA vote could reverberate nationally.

“The winds in this country do blow from the west to the east,” Wesson said. “And cities throughout the United States will watch what we do, and they will do the same. So the action that we’re taking today will affect millions.”

The economic effects of the LA plan have been hotly debated: Labor and community activists have heralded it as a victory for the working poor that will stimulate spending and the local economy.

Rusty Hicks, who leads the county labor federation, told city lawmakers that with the minimum wage plan, “you have the opportunity to begin to restore the lives of three-quarters of a million people that are working hard each and every day in the city of Los Angeles.”

But many business groups argue it could end up hurting workers because employers will slash jobs to survive. Ruben Gonzalez, senior vice president of the Los Angeles Area Chamber of Commerce, predicted job losses in an array of industries, including restaurants, hotels and the garment industry. LA, he said, is making things considerably harder for business owners.

“Think of the negative impacts to those owners who struggle to just try and make their American dream work,” he told the council. “Today, you made the American dream for so many, harder in Los Angeles.”

Three studies reviewed by lawmakers drew sharply different conclusions about how the wage hikes would reshape the economy, ranging from the ominous to the upbeat.

Under the LA plan, small businesses — those with 25 employees or fewer — would get an extra year to phase in the pay increases. So would some nonprofit organizations. After the citywide minimum hits $15 for all businesses, future increases would be tied to the annual change in the consumer price index.

At the Wednesday meeting, council members also agreed to create a new city division to crack down on employers who pay less than the required wages. Employers who short their workers on wages will be required to repay the money, plus at least a $100 penalty for each day the violation occurred. They could also face added penalties for other violations, such as retaliating against employees.

Some community activists and lawmakers are concerned the city isn’t devoting enough resources to the new office. As currently proposed, the new enforcement division would be staffed with five people at a cost of roughly $500,000 annually, a much smaller team than was recommended by a University of California, Berkeley study earlier this year.

(Los Angeles Times staff writer Abby Sewell contributed to this report.)

(c)2015 Los Angeles Times

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