Workers, Business Owners Discuss Mayor’s Proposal to Raise Minimum Wage

Workers Want Enforcement, While Businesses Want to Include Tips as Wages
By Crystal Niebla, Editorial Intern

With six children to care for, car wash employee Fausto Hernández García hopes Los Angeles officials will raise the minimum wage and enforce it, so that he and his family can live better.

On March 26, minimum wage workers and businesses owners came together in the Watts district of Los Angeles for the second, out of four, special meetings. The Economic Development Committee hosted meetings to discuss Los Angeles Mayor Eric Garcetti’s proposal to raise the minimum wage citywide.

Led by Los Angeles City Councilman Curren D. Price Jr., members of the council gathered at Phoenix Hall that evening with more than 250 attendees to hear public comments. Those in favor of the pay increase also urged city officials to enforce it due to the ongoing issue of “wage theft.”

García, 55, said he has been paid for as little as three hours when he actually worked 10.

“With the increase, one can pay rent completely,” he said. “And, this would be great for our children because we are limited with [the little] that is paid [now].”

Los Angeles’ current minimum wage is $9 per hour, which follows state law, and is slated to rise to $10 in 2016.

This past year on Labor Day, Garcetti announced he would like to raise the wage to $13.25 by 2017. The increase would take place in three steps, first to $10.25, then to $11.75 and finally to $13.25. His proposal also ensures future increases will match inflation rates.

Labor groups such as the CLEAN Carwash Campaign and Community Coalition attended the March 26 meeting, advocating for an increase to $15. The labor groups are following the campaign of #LARaisetheWage, which asks for $15.25 an hour, with paid sick leave and enforcement.

The advocacy came weeks after the Los Angeles City Council voted to set wages at $15.37 for workers at larger hotels, and for Los Angeles school workers.

“This is a fight for equity in our city—to make sure that those who have often been ignored [and] get paid the least get the dignity and respect that they deserve,” said Alberto Retana, executive vice president at Community Coalition. “For far too long, the wage gap between LA’s richest folks and LA’s poorest is far too wide.”

Few of the business owners who were against the minimum wage increase said the increase would be unfair for their businesses. Many of them urged the city council to increase minimum wage with conditions, such as including the tip money restaurant workers receive.

Consequences of the increase to business owners are projected by some to include cuts to workers’ hours and benefits, layoffs and relocation of businesses outside of the city.

In a University of California, Berkeley study requested by the mayor’s office, researchers found that the proposed minimum wage law “would have a modest impact on business operating costs and consumer prices.”

According to the report, about half of all affected workers “are employed in four industries: restaurants (17.4 percent); retail trade (13.9 percent); health services (11.7 percent); and administrative and waste management services (9.5 percent). Operating costs would increase by 0.6 percent for retailers, by 4.7 percent for restaurants, and by 0.4 percent in the manufacturing sector by the time the proposed law is fully implemented in 2017.”

The report adds that restaurant prices would increase by 4.1 percent by the time the minimum wage increase is in full effect.

“A $10 meal would increase by 41 cents, to a total of $10.41,” the report states as an example. As for retail and the local economy as a whole, the report states that the price increases would be “negligible.”

The report predicts that the restaurant industry might experience 560 fewer jobs a year over the three-year phase-in of the minimum wage increase and that some apparel manufacturing jobs might relocate outside the city.

Some business owners said they like the minimum wage increase proposal but that there can be better solutions.

A representative of the Los Angeles County Business Federation said at the meeting that even if workers earned $15 an hour, they would still be below the poverty line. Instead, he suggested that the city enable conditions that would create middle class jobs, which “would actually lift people out of poverty.”

Sherry Lear, a San Pedro lawyer who operates a small firm, said that the country and its economy is struggling because it’s losing its middle class. Lear, who pays employees more than $15 an hour with paid sick days and vacation, argued that raising the working poor will stimulate the economy and help businesses.

“I understand that some businesses may need to phase in to paying higher wages… but what I’m seeing among people who work for businesses… is that their bosses are building big houses and yet their wages are getting cut and their vacation pay is getting cut,” Lear said.

“So, while I’m not going to dispute the veracity of the people who came here today to talk, I do know that [there are] a lot of businesses out there [that] are making more profits than ever and paying their workers less, and that’s not how you build up an economy.”

García, who has washed cars for a living for 8 years, said the forum is helpful because it will create solidarity of workers like him to illuminate how business owners often mistreat their workers.