In the last issue, I explained the battle by groups wanting fast food workers to receive a $15 per hour minimum wage. Soon after, the Los Angeles City Council voted 14-1 to raise the city’s minimum wage to $15 per hour by 2020. The news was greeted eagerly by many, but it also has left small business owners unhappy. There is some concern that the move will eventually drive many owners out of L.A.
This change has been embraced by many, but I don’t believe the policy will be replicated in D.C. for a very long time. If the District was to increase its minimum wage to $15 per hour, many businesses would move across the river to Virginia, where the minimum wage currently is the same as the federal rate, $7.25 per hour. Plus, the District is already receiving an increase to $10.50 per hour this year and $11.50 per hour next year. It is also important to remember that the District’s budget must be approved by Congress, which is currently dominated by the Republican party, who do not desire to raise the minimum wage at all.
Only two years ago, D.C. lawmakers tried to make Wal-Mart pay a $12.50 per hour “living wage” by proposing the the Large Retailer Accountability Act. Wal-Mart was in the process of building three stores and threatened to shut them down if the City Council and Mayor passed the bill., which would require this new wage of any stores over 75,000 square feet and owned by chains with over $1 billion in sales. The bill passed the council on a 9-6 vote but was vetoed by Mayor Vincent Gray.The Current Mayor of Washington D.C. Muriel Bowser, sat on the D.C. City Council at the time and was one of the six Council members that voted against the bill.
Los Angeles’ new minimum wage will be closely watched by both advocates and critics, as it will provide a clear picture of what a large increase in the minimum wage can bring. There is serious concern among the restaurant industry as California’s laws do not allow for their servers to be paid less than minimum wage and that will put pressure on owners. One big group that are winners will be workers who were already getting close to $15 per hour, their wages will have to rise to prevent them from leaving.
Laborers who were already struggling to find work, such as people with low education or skills, or people re-entering society after being incarcerated, will have even more difficulty finding employment in Los Angeles’ higher-paid market. Another group that will struggle is teenagers. They may be able to find work with nonprofits who were one of the groups exempted from the requirements. Another area that will be looked at closely is how immigration will affect the legislation. Los Angeles has a large population of undocumented workers from Mexico who will find themselves even more desired by business owners looking to avoid paying U.S. workers the legally mandated minimum wage.
This is an important developing issue. People want the ability to be self-sufficient and have minimal or no reliance on government help to survive. Business owners want to make a decent profit, and that is understandable. But the desire for profits has to be balanced against the measures taken to generate them. Stay tuned.
