Monday, June 15, 2015

L.A. Boosts Minimum Wage: Employers Say They May Move or Trim Jobs

Workers react as Los Angeles City Council last week gave 
preliminary approval to raise the city’s minimum wage to 
$15 an hour by 2020. It gave final approval to the measure 
Wednesday. Photo: Damian Dovarganes/AP
The City Council on Wednesday approved a raise in the minimum wage to $15 an hour by 2020, giving a boost to similar efforts elsewhere but prompting objections from business groups that said it could lead to job losses.
The move will increase the city’s minimum wage in increments from California’s current $9 an hour, ultimately making it more than twice the current federal floor of $7.25. California’s minimum is set to rise by a dollar next year.
The unusually large increase came over the objections of small businesses and the region’s Chamber of Commerce, which said it will hurt stores and restaurants and cost the city jobs. Advocates called it a turning point, and the most concrete victory yet by unions, some big-city mayors and activists who have sought to make raising the minimum wage a central part of the income-inequality debate.
In a study conducted at the request of the City Council that evaluated a slightly higher minimum wage of $15.25, economists at University of California, Berkeley estimated that 609,000 workers, or 41% of the city’s total, would see their wages rise, while 3,472 jobs, or about 0.2% of employment, would be lost.
Other economists and business groups, however, said that research plays down potential job losses.
Jack Mozloom, a spokesman for the National 
Federation of Independent Businesses
Jack Mozloom, a spokesman for the National Federation of Independent Businesses, said such wage increases will “only have the effect of damaging some businesses that can’t keep up, and that will only hurt those workers who the advocates claim they want to help.”
George Abou-Daoud, who owns eight restaurants in Los Angeles, said the ordinance will be a serious blow. He failed to persuade the council to have tips made by employees count toward their minimum wage.
George Abou-Daoud (right) at one of his restaurants
“I am going to have to figure out how to be open fewer hours,” he said.
Business groups say the higher minimum wage will prompt some employers to automate tasks. And since the wage increase doesn’t apply to the other areas of Los Angeles County, business leaders say employers could move operations to where labor costs are lowest.
Read the rest of the story HERE.

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