Today I publicly submitted a motion, to be voted on by the full Board next week, which would raise the minimum wage for workers in Los Angeles County’s unincorporated areas, as well as for our own County workers.

My motion adopts the same minimum-wage plan developed for the City of Los Angeles, and encourages the County’s other 87 incorporated cities to follow suit to create a uniform, region-wide minimum-wage policy.

There are 2.7 million residents in Los Angeles County living in poverty, with an average annual household income of less than $31,000 for a family of four. For perspective, that’s more people living in poverty within our County lines than the entire population of Chicago.

These folks, despite working full-time, earn too little to cover even their bare necessities such as safe housing, healthy food, adequate clothing and basic medical care. This is intolerable in a society that values hard work, equity and fair reward.

This January the statewide minimum wage goes up to $10 an hour, but even with that increase a full-time minimum-wage worker will make only $20,800 a year. Here in LA County, with an average rent of $1,716 a month, that worker couldn’t even afford the average cost of keeping a roof over their family’s head, much less all their other expenses.

Since August 2014, there have been four studies from a variety of ideological perspectives attempting to assess the economic impacts of raising the minimum wage in the City of Los Angeles. In March of this year, our Board asked the Los Angeles County Economic Development Corporation (LAEDC) to undertake its own review of those four studies, with an added emphasis on gauging the potential effects on businesses and workers of raising the minimum wage in the County’s unincorporated areas, and the fiscal impact on the County budget, where roughly 5,000 County employees, or 5% of the County workforce, could also be impacted.

The LAEDC has finished its review of the studies, and their report (final draft forthcoming) found all four studies agreed on only one finding: that no loss of jobs is predicted, even by the most conservative study. But that wasn’t the big news.

The greatest surprise in the report came from the totally unexpected results of an independently conducted survey of randomly selected business across all of LA County, commissioned by LAEDC, and answered by 1,000 businesses. The businesses were asked to confidentially answer a series of 24 questions about the makeup of their workforce, and how their business decisions might be affected by an increase in the minimum wage.

We already knew from other studies that minimum-wage workers and their families benefit from an increase in household income and that increasing their purchasing power will help stimulate the local economy. There had not been a direct survey, however, on how those benefits might be offset by negative economic impacts, such as reduced hours, layoffs, or an exodus of businesses to lower-wage jurisdictions.

The surprising findings of this business survey directly contradicted much of the “sky is falling” rhetoric we hear in opposition to raising the minimum wage.

  • 0% of the employers surveyed said they planned to close their business due to raising the minimum wage
  • 6% said it was even somewhat likely they would reduce the number of minimum-wage employees
  • 2% said it even somewhat likely they would reduce the work hours of their minimum wage employees
  • 2% said it even somewhat likely they would invest in labor-saving or labor-replacing devices or processes
  • 66% thought it likely they would save money with the wage raise by reducing the cost of employee turnover
  • 0% of employers surveyed (again, out of 1000!) said it was likely they would move their business to a community with a lower minimum wage

And there were other benefits expressed beyond alleviating poverty:

  • 66% thought it likely they would save money with the wage raise by reducing the cost of employee turnover
  • 66% said they are likely to increase their minimum wage to match wages paid by other cities or regions nearby
  • 72% of the employers believe that their employees would be happier and more productive if they are better paid

The survey also looked at the sort of worker now earning the minimum wage. Again, the results contradicted oft-repeated rhetoric like that it’s mostly teenagers or people not interested in a career.

The survey found that:

  • 70.5% of minimum-wage workers are full-time employees
  • Only 3.4% of minimum-wage workers are teenagers

In fact, the LAEDC study notes, “There is broad agreement…about the characteristics of the workers that are likely to be affected…almost 97% are adult workers with a median age of 33 years,” adding that the data “deviates markedly from the common belief that minimum wages are typically paid to teenagers.”

In summary, setting aside the rhetoric and looking at the actual thinking of businesspeople contemplating a minimum wage hike, very few employers surveyed expect substantial negative impacts from raising the minimum wage, and in fact a commanding percentage believe their businesses and employees will be better off.

With Los Angeles County and the City of Los Angeles adopting the same minimum-wage plan, nearly half of all our County’s residents would be covered by a uniform minimum wage increase, and I hope that will encourage the County’s other 87 incorporated cities to follow suit for a uniform, region-wide minimum-wage policy.

This plan means, beginning in 2016, the minimum wage in the County of Los Angeles will increase annually, as follows, for all employers (including nonprofits and businesses) with 26 or more employees as well as employees of the County of Los Angeles, the region’s largest employer:

  1. July 1, 2016 $10.50
  2. July 1, 2017 $12.00
  3. July 1, 2018 $13.25
  4. July 1, 2019 $14.25
  5. July 1, 2020 $15.00

Employers with fewer than 26 employees will have two years to prepare for the phase-in launch, and will then follow the rollout schedule below:

  1. July 1, 2017 $10.50
  2. July 1, 2018 $12.00
  3. July 1, 2019 $13.25
  4. July 1, 2020 $14.00
  5. July 1, 2021 $15.00

The virtue of this plan is that it is good for workers AND business. It’s economically sound and well-researched. Most importantly, it helps lift those all around us – our family, our friends, our neighbors, the hard-working folks who watch our kids, wash our cars, serve us in restaurants, clean the buildings we go to each day and more – out of poverty.

This is one of the great privileges and challenges of being an elected official, in one motion, with support, you can help to ensure that, in our County, every person willing and able to work is paid a fair and livable wage.

 

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