Los Angeles, CA, United States (4E) – Los Angeles Mayor Eric Garcetti is proposing to place the hourly wage in the state at $13.25 per hour, which is nearly double the current federally regulated hourly wage.
Under his proposal, the City Council would have the USD9.00 per hour wage raised to USD10.25 by 2015 and then have annual raises of USD1.50 until it reaches the amount by 2017.
Garcetti made the announcement via his Facebook page, where he said, “Today, we launch the biggest anti-poverty campaign program in L.A. history. We are going to raise the minimum wage.”
He reiterated his plan during a gathering at Martin Luther King Jr Park in South Los Angeles. In raising the minimum wage, he wants to enable workers to live above the poverty level.
The current rate per hour by law is at USD9.00 per hour.
Garcetti pointed out that despite the declining unemployment in California, the full recovery is being threatened by ‘the erosion of wages for low and middle wage workers.’
He added, “I’m proposing to responsibly and gradually raise the minimum wage in L.A. to USD13.25 because it’s deplorable and bad for our economy to have one million Angeleno stuck in poverty, even when working full time.”
This is the most ground breaking initiative of the new Garcetti administration in City Hall. The proposal would directly benefit over half a million workers in the city, with an increase of nearly 21% annually for the next three years or about USD3200 per year until 2017. These figures were obtained by research commissioned by the Mayor’s office through the assistance of experts from UC Berkeley.
The report further indicated that the impact of the higher wages on overall employment in the city ‘is not likely to be significant.’
The reaction to the proposal was swift as it was vitriolic. Many business leaders and captains of industry in the Los Angeles area said that the proposal would result in layoffs, cutbacks in workers hours as well as increase costs for consumers because of the additional cost on business.
One of them, Valley Industry and Commerce Association President Stuart Waldman had said the proposal caused ‘extreme concern’ throughout the business community.
He said, “This is a huge increase on labor costs, especially for small businesses and nonprofits, who have no ability to just raise their prices or absorb increased costs.”
This was echoed by Los Angeles area Chamber of Commerce President Gary Toebben. He told local media scribes that he fears that many business owners would be unable to keep their labor workforces if they are forced to comply with the steep hourly wage rates.
The said proposal or a version of it may pass with the City Council, with seven of them sitting behind the mayor when he made his announcement. This will also win approval with the labor and civic sectors of the city.