Raise the wage to lift all boats

The City of Los Angeles has the opportunity to act on an ambitious and important minimum wage proposal that can dramatically improve the lives of many, but we must do so in a way that will actually create jobs, improve our economy and best serve our entire community. Yesterday, the Council’s Economic Development Committee heard testimony on a pair of motions that merged together will help advance the minimum wage increase in a deliberative manner.

This past Labor Day, Mayor Eric Garcetti put forward a plan to raise the City’s minimum wage from the current $9.00 per hour, to $13.25 per hour by 2017.

With 27% of Los Angeles residents living at or below the poverty line, raising the minimum wage is a noble goal. I applaud the Mayor, and my colleagues who authored the motion, Councilmembers Mike Bonin, Curren Price, Nury Martinez and Gil Cedillo, for their commitment to bettering the circumstances of more than half a million of our fellow Angelenos.

And as we work together to lift families out of poverty, it is crucial that we be deliberative and get it right--particularly because there will be real impacts felt by small businesses and non-profit providers who drive our economy and serve our vulnerable communities. Making sure these impacts are fully studied and properly mitigated is the intent of the second measure considered by the Committee today, which I offered last week alongside Councilmember Mitch O’Farrell.

We know that raising wages is a proven way to put money into the hands of the working poor and who will, in turn, spend that money locally. But legislation is equal parts art and science, and all too often the devil is in the details.  We know that wages in this country have been stagnant for too long, and we know that many people who work full time receive food stamps and other government assistance. What we don’t fully understand are some of the unintended consequences of a wage increase. 

Among the open questions is how an increase in the City’s minimum wage would affect non-profit organizations who cannot pass along increased costs to consumers, and will not benefit directly from increased local spending. Some non-profits, including those who serve those with developmental disabilities and other vulnerable populations, rely almost exclusively on financial support from state and federal reimbursements but these reimbursement rates do not take in to account cost of living data, including local minimum wage. Consequently, unless that changes, they will likely have to cut services. Also, questions about the impact of a wage increase on struggling small businesses and apprenticeship programs also abound.

My motion with Councilmember O’Farrell seeks answers to some of the impacts questions and asks for consideration of solutions or mitigations via an economic study to be conducted as this new policy moves through the legislative process.

The Los Angeles Times recently editorialized in favor of this measured approach, writing that “[the] proposal to enact L.A.'s first citywide minimum wage could be one of the most significant pieces of legislation that today's council members will vote on during their tenures. Surely they can take the time to get it right.”

Today, Chairman Price and the Committee unanimously recommended moving forward with the kind of comprehensive examination of the minimum wage, its impacts both negative and positive, intended, unintended and otherwise—which will better equip policymakers and inform residents.

Through a vigorous and deliberative process, it is my hope that we can best achieve the spirit of the Mayor’s proposal, namely to reduce instances of poverty in Los Angeles. It is often said that a rising tide lifts all boats; it is my hope that by doing our due diligence, a rising wage will strengthen workers' pocketbooks, our economy and the spirit of this great City and its people.

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