Economic Development Committee Approves Recommendations for City-wide Minimum Wage Policy

The new wage would reach $15 by July 1, 2020, helping to lift more than 600,000 Angelenos out of poverty

Los Angeles – The minimum wage in Los Angeles would increase to $15 by 2020, with a delayed wage schedule for small businesses and non-profits with fewer than 25 employees, under a series of recommendations approved today by the City’s Economic Development Committee. The committee instructed the City attorney to begin drafting an ordinance for the new policy which would also increase wages annually, based on the average CPI over the previous 20 years, beginning July 1, 2022 and would include monitoring of impacts and a hardship waiver for non-profits meeting certain criteria that includes serving transitional employees or receiving most of their funding from state and federal funding that goes towards at least 50 percent of their payroll.

“We cannot have a robust local economy, with successful small businesses that benefit from a solid local customer base, if more than a third of Angelenos cannot afford a decent place to live, let alone a meal out or the occasional new pair of shoes,” said Councilman Curren Price, Chair of the Economic Development Committee and an author of the minimum wage policy. “This is about bringing equity to our City and ensuring that all families, in all parts of the City and from all backgrounds, can survive and thrive in LA.”

The proposal for a city-wide minimum wage policy is 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 wages in Los Angeles to $13.25 by 2017 and $15.25 by 2019. The Economic Development Committee later commissioned a study on the economic impacts of their proposal, which was performed by the University of California Berkeley. 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. Councilman Price also called on key stakeholders, the Los Angeles Chamber of Commerce and the Los Angeles County Federation of Labor, to produce their own economic impact reports to ensure diverse perspectives on the issue. To encourage further debate and gather critical community input, Councilman Price also hosted Economic Development Committee hearings throughout the city and he commissioned a peer review of all studies.

"Since last fall, our City has been involved in an important discussion regarding an increase to the minimum wage and today my colleagues and I discussed the many tough questions before us. Now I believe that our City is one step closer to a fair minimum wage that works for businesses and employees and ensures a better future for families in the Sixth District. We are not done yet but these conversations will improve our final legislation and, after these conversations, I am proud to support this legislation,” said Councilwoman Nury Martinez. “This is a big, big deal," said Councilmember Mike Bonin. "Hard working Angelenos deserve a fair wage for a day's work and we are now one major step closer to winning economic justice for workers in our neighborhoods and economic prosperity for the small businesses where this additional income will be spent. I, and hundreds of thousands of workers throughout Los Angeles are incredibly appreciative of Councilmember Price and the Committee's stewardship of this historic proposal as it went through a thorough committee process."

“Today is a historic day in Los Angeles, where we have shown true leadership and continue to life the average worker up from poverty,” said Councilman Gil Cedillo. “Today’s action along with the enforcement tools we moved last week will ensure workers receive the wages and respect they deserve.”

The committee’s approved recommendations will have to be finalized by the full Council before being drafted by the City Attorney. The Council is expected to take up the item next week.

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