L.A. passes minimum wage hike
City Council OKs raise to $15 an hour within five years
The Los Angeles City Council on Wednesday approved a 66% hike in the minimum wage to $15 an hour, a widely watched move by companies already fearing a upward trend in labor costs.
The move by the nation’s second-largest city has enormous potential ramifications for companies that do business here, but also sets a national message. Los Angeles is the largest city yet to push through a broad and orchestrated increase in wages. Wages account for a large slice of the expenses faced by companies that do business in industries with large employee head counts. The increase could directly impact big employers ranging from McDonald’s to Walmart and Target.
Specifically, the City Council approved an ordinance that would take the minimum wage from $9 an hour to $15 an hour in five years. The rule would require companies with more than 25 employees to comply over time in small increments until hitting $15 an hour by 2020. Smaller businesses would get an extra year to comply. The ordinance still must be signed into law by Democratic Mayor Eric Garcetti. He is expected to sign the ordinance by this weekend.
Opponents of the rule say a higher minimum wage will hurt companies forcing some to lay off employees or move out of Los Angeles, altogether. But the movement to pay higher wages is already taking hold across the nation as the federal minimum wage has been stuck at $7.25 an hour since 2009.
Los Angeles is following movements to push wages up to $15an-hour over time in both Seattle and San Francisco. Both Walmart and Target have also already announced plans to start pushing wages higher. Walmart in February announced it would boost minimum wages for entry level and long-term hourly workers to $10 an hour or more by early next year.
Shares of Walmart are up 49 cents to $72.94, Target shares are up 89 cents to $79.77 and shares of McDonald’s are up 65 cents to $95.35.
A number of the Los Angeles area’s largest employers are based outside of city limits, so won’t be directly affected. Walt Disney has more than 180,000 total employees worldwide, including a large number throughout Southern California. But its headquarters is located outside of Los Angeles in Burbank, Calif., and Disneyland is based in Anaheim, Calif. Several large apparel makers, though, are based in Los Angeles including Guess and American Apparel, who reported most recent worldwide employee counts of 13,700 and 10,000, respectively.
“This is nothing short of historic. Historic for our city. Historic for the economic equality movement. And historic for fulltime workers and their families who live on poverty wages. We couldn’t have done it without you. And we can’t thank you enough,” said Laphonza Butler and Rusty Hicks of the Los Angeles County Federation of Labor, AFL-CIO in a joint statement.
“This is nothing short of historic. Historic for our city. Historic for the economic equality movement.” Laphonza Butler and Rusty Hicks, Los Angeles labor leaders