LOS ANGELES — The nation’s
second-largest city voted Tuesday to increase its minimum wage from $9 an hour
to $15 an hour by 2020, in what is perhaps the most significant victory so far
for labor groups and their allies who are engaged in a national push to raise
the minimum wage.
The increase, which the City
Council passed in a 14-to-1 vote, comes as workers across the country are
rallying for higher wages and several large companies, including Facebook and
Walmart, have moved to raise their lowest wages. Several other cities, including
San Francisco, Chicago, Seattle and Oakland, Calif., have already approved
increases, and dozens more are considering doing the same. In 2014, a number of
Republican-leaning states like Alaska and South Dakota also raised their
state-level minimum wages by ballot initiative.
The effect is likely to be
particularly strong in Los Angeles, where, according to some estimates, almost
50 percent of the city’s work force earns less than $15 an hour. Under the
plan approved Tuesday, the minimum wage will rise over five years.
“The effects here will be the
biggest by far,” said Michael Reich, an economist at the University of
California, Berkeley, who was commissioned by city leaders to conduct several studies on the potential
effects of a minimum-wage increase. “The proposal will bring wages up in a way
we haven’t seen since the 1960s. There’s a sense spreading that this is the new
norm, especially in areas that have high costs of housing.”
The groups pressing for higher
minimum wages said that the Los Angeles vote could set off a wave of increases
across Southern California, and that higher pay scales would improve the way of
life for the region’s vast low-wage work force.
Supporters of higher wages say
they hope the move will reverberate nationally. Gov. Andrew M. Cuomo of New York
announced
this month that he was convening a state board to consider a wage increase in
the local fast-food industry, which could be enacted without a vote in the State
Legislature. Immediately after the Los Angeles vote, pressure began to build on
Mr. Cuomo to reject an increase that falls short of $15 an hour.
“The L.A. increase nudges it
forward,” said Dan Cantor, the national director of the Working Families Party,
which was founded in New York and has helped pass progressive economic measures
in several states. “It puts an exclamation point on the need for $15 to be where
the wage board ends up.”
The current minimum wage in New
York State is $8.75, versus a federal minimum wage of $7.25, and will rise to $9
at the end of 2015. A little more than one-third
of workers citywide and statewide now make below $15 an hour.
Los Angeles County is also
considering a measure that would lift the wages of thousands of workers in
unincorporated parts of the county.
Much of the debate here has
centered on potential regional repercussions. Many of the low-wage workers who
form the backbone of Southern California’s economy live in the suburbs of Los
Angeles. Proponents of the wage increase say they expect that several nearby
cities, including Santa Monica, West Hollywood and Pasadena, will also approve
higher wages.
But opponents of higher minimum
wages, including small-business owners and the Los Angeles Chamber of Commerce,
say the increase approved Tuesday could turn Los Angeles into a “wage island,”
pushing businesses to nearby places where they can pay employees less.
“They are asking businesses to
foot the bill on a social experiment that they would never do on their own
employees,” said Stuart Waldman, the president of the Valley Industry and
Commerce Association, a trade group that represents companies and other
organizations in Southern California. “A lot of businesses aren’t going to make
it,” he added. “It’s great that this is an increase for some employees, but the
sad truth is that a lot of employees are going to lose their jobs.”
The 67 percent increase from the
current state minimum will be phased in over five years, first to $10.50 in July
2016, then to $12 in 2017, $13.25 in 2018 and $14.25 in 2019. Businesses with
fewer than 25 employees will have an extra year to carry out the plan. Starting
in 2022, annual increases will be based on the Consumer
Price Index average of the last 20 years. The City Council’s vote will
instruct the city attorney to draft the language of the law, which will then
come back to the Council for final approval.
The mayor of Los Angeles, Eric
Garcetti, a Democrat, had proposed a slightly different increase last fall and
later negotiated the details with the Democratic-controlled Council. Mr.
Garcetti said Tuesday that he would sign the legislation and that he hoped other
elected officials, including Mr. Cuomo, would follow Los Angeles’s path.
“We’re leading the country; we’re
not going to wait for Washington to lift Americans out of poverty,” Mr. Garcetti
said in an interview. “We have too many adults struggling to be living off a
poverty wage. This will re-establish some of the equilibrium we’ve had in the
past.”
New York City does not have a
separate minimum wage, but Mayor Bill de Blasio has spoken out in favor of
higher wages statewide. “Los Angeles is another example of a city that’s doing
the right thing, lifting people up by providing a wage on which they can live,”
Mr. de Blasio said in a statement “We need Albany to catch up with the times and
raise the wage.”
The push for a $15-an-hour minimum
wage is not confined to populous coastal states. In Kansas City, Mo., activists
recently collected enough signatures to put forward an August ballot initiative
on whether to raise the minimum wage to $15 by 2020. The City Council is
deliberating this week over how to respond and could pass its own measure in
advance of the initiative.
As the Los Angeles City Council
considered raising the minimum wage over the last several months, the question
was not if, but how much. The lone councilman who voted against the bill — a
Republican — did not speak during Tuesday’s meeting.
Still, for all their enthusiasm,
some Council members acknowledged that it would be difficult to predict what
would happen once the increase was fully in effect.
“I would prefer that the cost of
this was really burdened by those at the highest income levels,” said Gil
Cedillo, a councilman who represents some of the poorest sections of the city
and worries that some small businesses will shut down. “Instead, it’s going to
be coming from people who are just a rung or two up the ladder here. It’s a risk
that rhetoric can’t resolve.”
Even economists who support
increasing the minimum wage say there is not enough historical data to predict
the effect of a $15 minimum wage, an unprecedented increase. A wage increase to
$12 an hour over the next few years would achieve about the same purchasing
power as the minimum wage in the late 1960s, the most recent peak.
Many restaurant owners here
aggressively fought the increase, saying they would be forced to cut as much as
half of their staff. Unlike other states, California state law prohibits tipped
employees from receiving lower than the minimum wage. The Council promised to
study the potential effect of allowing restaurants to add a service charge to
bills to meet the increased costs.
And while labor leaders and the
coalition of dozens of community groups celebrated in the rotunda of City Hall
after the vote, they acknowledged there was a long way to go.
“This says to Los Angeles workers
that they are respected, and that’s an important psychological effect,” said
Laphonza Butler, the president of Service Employees International Union-United
Long Term Care Workers here and a leader of the coalition. “To know that they
have a pathway to $15, to getting themselves off of welfare and out of poverty,
that’s huge. This should change the debate of the value of low-wage
work.”
Jennifer Medina reported from Los Angeles, and Noam Scheiber from
Washington.