UC Berkeley Study of Minimum Wage Finds that Benefits of Proposed Increase Outweigh Costs for City of Los Angeles

Los Angeles –The City’s current proposal to raise the minimum wage in Los Angeles to $15.25 by 2019 would improve the lives of more than 600,000 Angelenos and create a positive economic impact for Los Angeles, a report released Thursday by the University of California Berkeley found. The Economic Impact report, The Proposed Minimum Wage Law for Los Angeles: Economic Impacts and Policy Options, found that “the benefits of the proposed minimum wage law will largely outweigh the costs in Los Angeles City, and when the larger region is considered, the net impact of the law will be positive.” The report also found that up to 600,000 Angelenos would see a pay increase of up to 30 percent by 2019, with the largest proportion of those residents – more than 80 percent - being people of color from underserved communities.

The study was commissioned by the City of Los Angeles as a result of a motion introduced last fall by Councilman Curren Price along with his colleagues, Councilmembers Nury Martinez, Mike Bonin and Gil Cedillo, which called for raising the minimum wage in Los Angeles to $13.25 by 2017 and $15.25 by 2019. Mayor Eric Garcetti also laid out his proposal to raise wages in Los Angeles last summer to $13.25 by 2017. Both proposals would attach future increases to the Consumer Price Index ( CPI).  

“As a policy maker, representing one of the poorest regions in this City, I know the real life impact that stagnant wages have had on our underserved communities,” said Councilmember Curren Price.

 “This study helps us better understand the magnitude of income inequality in Los Angeles while also providing us with reassuring data that shows that a minimum wage increase, done thoughtfully, will have benefits for the local economy and businesses.”

The UC Berkeley study found that while the economic recovery has created new jobs, wages have actually fallen, by nearly 10 percent from 2007 through 2013.  The study also found that a minimum wage increase would produce an increase in sales and business tax receipts for the City of $2.6 million by 2017 and $4.7 million by 2019. Also released Thursday were studies commissioned by the Los Angeles Chamber of Commerce and the Los Angeles County Federation of Labor. These studies were requested by Councilman Price, as Chair of the Economic Development Committee, to ensure robust debate on this critical policy issue.

“These studies will help inform our discussion as we look for ways to craft the smartest policy for our City,” Councilman Price added.

Allowing for ample community input, Councilman Price is also hosting Economic Development Committee hearings throughout the city at the following dates, times and locations:

 

Tuesday, March 24th, 1:00pm

Los Angeles City Hall

John Ferraro Council Chambers

200 North Spring Street

Los Angeles, CA 90012

 

Thursday, March 26th, 6:00pm

Watts Labor Community Action Committee
10950 South Central Avenue

Los Angeles, CA 90059

Tuesday, March 31st, 6:00pm

Los Angeles City Hall - Van Nuys

6262 Van Nuys Boulevard

Van Nuys, CA 91401

Thursday, April 2nd, 6:00pm

Museum of Tolerance

9786 West Pico Boulevard

Los Angeles, CA 90035

 

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