County wades into fray on wages
Following L.A.’s lead, the supervisors vote to study increasing minimum pay rates in unincorporated areas.
The movement to substantially increase the local minimum wage won a significant boost Tuesday when the county Board of Supervisors voted to follow the city of Los Angeles in studying the idea.
Until now, the campaign to raise the wage to as much $15.25 an hour has largely focused within the city of 4 million residents, prompting concerns that businesses would move to communities where wages remain lower.
But with their vote Tuesday, the supervisors put in play unincorporated areas that include an additional 1 million residents and stretch from the High Desert to the San Gabriel Valley.
The supervisors agreed to weigh the impact of not only requiring a higher baseline pay for their roughly 100,000 employees — the largest local government workforce in the United States — but also for county contractors and businesses in those unincorporated areas.
Their 5-0 vote also marks a statement from the board’s new majority, which has been widely expected to prove friendlier to labor causes than their predecessors.
Supervisor Sheila Kuehl, the lead proponent of the study, who was elected last year with strong union support, noted that 2.7 million county residents live below the federal poverty level.
“What our county does as an employer, as a regional wage setter, is vitally important to the economy and quality of life in the region,” she said.
Supervisor Michael D. Antonovich, who made the vote unanimous even though he opposes raising the minimum wage, insisted that the study look at
whether the shift would send economic activity out of region.
“You have a situation where a person can go across that boundary to purchase their products at a lower price, and also those in the county part could have a job loss,” he said.
The drive to raise the minimum wage in Los Angeles is part of a national labor movement to boost pay for low-wage workers to about $15 an hour. California cities including San Francisco, Oakland and San Diego have recently increased their minimum wages above the state requirement. Several cities in Los Angeles County — including Santa Monica and West Hollywood — are considering following suit.
Historically, the county has been more fiscally conservative than the city. But the balance of power on the board shifted with the election of Kuehl and former U.S. Labor Secretary Hilda Solis last year.
Labor groups made a push before the vote, with supporters speaking out, including United Farm Workers co-founder Dolores Huerta, who was honored earlier in the meeting as part of the county’s Cesar Chavez Day celebration.
“I think the study will show that the economy will benefit and everyone will be better off,” Huerta said.
The county step comes as Los Angeles leaders are poised to gradually raise the minimum wage for everyone working within city limits from $9 an hour — the current state minimum — to as much as $15.25.
Many local business leaders have argued that an increase would lead to job losses at a time when the city is trying to improve its image for business development. But with a City Council also heavily backed by labor, the debate has mostly been over not whether to raise the rate, but how much and how fast.
Backers of a Los Angeles wage increase say it would pull families out of poverty and stimulate the economy. But business groups predict that it would reduce profits and force companies to move or cut jobs, hurting the same workers most likely to receive the higher wages.
City lawmakers are currently holding a series of public hearings to gauge how residents feel about two basic proposals:
Mayor Eric Garcetti wants to raise the wage to $13.25 by 2017, and then have it automatically adjust according to inflation. Six City Council members, however, want to build on the mayor’s plan but boost the rate to $15.25 by 2019. The council is widely expected to vote on the issue this spring.
During the supervisors’ meeting, representatives of the business and nonprofit sectors gave conflicting assessments of the potential effects. There are 7,700 businesses licensed in unincorporated areas, but it was not immediately clear how many of them would be affected by a wage increase. As part of the study, the county also plans to convene hearings to allow business owners to express their views.
Nancy Berlin, policy director of the California Assn. of Nonprofits, said that although groups opposed to minimum wage increases might use nonprofits as a “front man” in their arguments, the majority of the nonprofits she had heard from were supportive. Raising the wage is “an important and effective tool in reducing poverty in our communities,” she said.
But Stuart Waldman, president of the Valley Industry and Commerce Assn., said he had heard deep concerns from some of the nonprofits his group represents.
“You are picking winners and losers when you are increasing the minimum wage,” he said. “There are businesses that just aren’t going to survive. That’s a fact.”
Jesus Huerta, who owns El Gallo Bakery and two small restaurants in unincorporated East Los Angeles, said in an interview that when the state minimum wage increased from $8 to $9 last year, he had been unable to raise prices to make up the cost. An increase to a $13.25 or $15.25 minimum wage could be a death sentence for his shops, Huerta said.
“In the bakery business, that will for sure put us out of business, at least in the retail space,” he said. “I wish we could [pay more] but it’s not something feasible in our industry.”
Some business groups have urged the supervisors to look at exempting tipped employees, a proposal that union representatives adamantly objected to. To give tipped workers a different wage would require a change in state law.
The study proposed by Kuehl and Solis will look at the potential effect on businesses in unincorporated areas.
It will also look at how wage increases might cause jobs to shift around the region or change the number of people on public assistance. And it will look at the fiscal impact to the county of raising the minimum wage for county employees.
The analysis will be conducted by the Los Angeles County Economic Development Corp. and will begin with a review of three recently completed studies of the city’s proposed minimum wage increase, which reached divergent conclusions about whether and to what extent it would help or hurt the economy.
Of the county’s 96,000 employees, only about 5,000 make less than $15.25 an hour, but the study will also look at the likely ripple effect of wage increases for workers making slightly more when their labor contracts come up for renewal.
County unions hailed the proposal as a first step toward raising wages.
“For too long, low-road contractors have undercut L.A.’s middle class with poverty wages, no benefits and no retirement security,” Blaine Meek, head of the Coalition of County Unions, said in a statement before the vote. “We look forward to working with the supervisors to lift up the regional economy by raising the wages of our lowest paid workers.”
Supervisor Mark Ridley-Thomas is pushing to increase the current $9.64 “living wage” paid to county contractors as well, a step that is also backed by labor groups.