Minimum Wage To Rise To $15 By 2020
In a blow to the small businesses across the city, on Tuesday Los Angeles’ City Council voted 14-1 to boost the city’s minimum wage from its current $9 per hour to $15 per hour by 2020. The move is expected to affect up to 800,000 workers in the city. By some projections, the New York Times notes, “more than 40 percent” of the city’s workforce currently makes under $15 per hour. The Times also suggests the move may trigger what it calls “a wave of minimum wage increases across Southern California.”
With the vote, Los Angeles is now the largest city in the US to adopt a large, mandated minimum wage increase. The lone dissenting vote on the measure came from Councilman Mitchell Englander, the sole Republican council member. In a statement noted by the Los Angeles Times, Englander warned the wage hike might “make it impossible for entire industries to do business” in Los Angeles. He warned, “The very last thing that we should be doing as a city is creating a competitive disadvantage for our businesses with those in neighboring cities.”
What Happens Next
For the time being, Los Angeles’ minimum wage will remain at its current $9 level. With Tuesday’s vote, the city council instructed City Attorney Mike Feuer to craft an ordinance to enforce the wage increases. This sets up a final vote on the measure for June, at which time Mayor Eric Garcetti says he will sign the measure into law. If he does, the first wage increase of $1.50 per hour would take effect in July, 2016. After that, yearly step increases would continue until the $15 wage hike is reached in July 2020. Automatic increases would then be tied to the Consumer Price Index.
What This Means For Small Businesses
A boost to Los Angeles’ minimum wage may force many small businesses to reduce staff, cut employees’ hours, or relocate their businesses away from the city. Additionally, Los Angeles serves as a model for cities across the US as they face growing pressure from unions to boost wages, and small businesses in other cities may soon face similarly costly wage mandates.