County plan would mirror L.A.’s pay hike
Supervisor Kuehl wants workers in unincorporated areas to get lift from poverty.
Los Angeles County Supervisor Sheila Kuehl said Monday that she intends to propose a minimum wage increase for county workers and businesses in unincorporated areas that mirrors the plan recently approved by the city of Los Angeles.
The proposal would raise the wage from $9 an hour to $15 by 2020. Kuehl said she would officially introduce the plan Tuesday, to be scheduled for a vote the following week.
Under her proposal, the timeline of increases would follow the city’s trajectory. An increase in the statewide minimum wage to $10 an hour in January would be followed by a bump to $10.50 in July of 2016. After that, it would gradually increase to $15 by July 2020. Companies with fewer than 26 employees would be given an extra year to implement the plan. Kuehl did not address the issue of mandatory sick days or an exemption for union workers, both of which became controversial in the city wage discussions.
“My main concern has been trying to help people rise out of poverty,” Kuehl said. “The truth is our wages have not been keeping up with the rising cost of rent, housing, even food. It’s very difficult to live in L.A. these days.”
An estimated 389,570 people are employed in unincorporated areas like East Los Angeles and Altadena, making up about 10% of the
total county workforce.
Kuehl said she thinks it is “important that the county areas not suffer from a labor drain because workers are seeking out the higher wages in the city of L.A.”
Her written proposal argued that following the same schedule as the city would “minimize confusion, disruption and destructive cross-jurisdictional conf lict and competition for both workers and businesses” and might encourage the county’s other 87 incorporated cities to follow suit.
Several studies that came out in the lead-up to the city’s wage increase — signed into law by Mayor Eric Garcetti on Sunday — reached divergent conclusions about whether the move would boost or harm the local economy. The county supervisors commissioned a study of their own by Los Angeles County Economic Development Corporation to study the effects of a similar increase in unincorporated areas. The final report is expected this week. A draft was completed earlier this month.
The draft included the results of a telephone survey of a random sampling of 1,000 businesses throughout the county — in the city of Los Angeles and in other cities as well as in unincorporated areas — presenting the first look at data collected directly from affected businesses.
Nearly 80% of businesses said they had employees making less than $15.25 — the level being considered by the city when the county study was commissioned. The businesses surveyed that had minimum wage workers reported that the those employees made up 17.9% of their current workforce, and 70.5% of the minimum wage workers were full-time employees.
None of the businesses surveyed said it was likely that they would close down or move to an area with lower minimum pay as a result of the wage increase, and the majority said it was not likely they would reduce the number of workers they employ or cut their hours back.
But 62% said they would likely raise their prices to make up for the increased labor costs.
The report surmised that the higher proposed wages could lead to competition among local workers and those who would commute from other jurisdictions in search of higher pay.
“This will leave lesser candidates competing for jobs in other regions, perhaps further depressing wages elsewhere, f looding those markets with less qualified candidates and increasing unemployment rates of those cohorts,” the economists wrote. “The least qualified minimum wage workers, such as new labor force entrants, teens, ex-offenders and the lowerskilled, will have a difficult time finding employment at the higher minimum wage level.”
But they added, “On the flip side of that market, firms in neighboring jurisdictions will face defections of their best-performing minimum wage workers and will need to compete in the labor market.”
Two-thirds of businesses surveyed said that even if the minimum wage did not increase in their own jurisdiction, they would likely increase the wages they pay to compete with neighboring areas, and 70% said they would likely raise prices to match those of businesses paying a higher minimum wage.