The Fight for $15 in the United States’ second most populated city is finally over.
We previously posted about how Seattle took the lead on setting the highest minimum wage in the country. This April, we highlighted how public benefits subsidize low wages for big businesses and the Fight for $15 . Now we are delighted to report that progress has been made in California, Los Angeles is following in Seattle’s footsteps.
By a margin of 14-1, the Los Angeles City Council voted to increase the current minimum wage of $9 to $15 an hour over the next five years. Los Angeles’s minimum wage increase follows other large cities across America, including San Francisco, Oakland, Chicago and Seattle. This win is especially important in Los Angeles, as it is estimated that almost 50 percent of Los Angeles workers earn less than $15 an hour.
Advocates hope that more cities and states across America will duplicate these beneficial wage increases. Already Washington D.C, Kansas City, and New York City have a proposed a minimum wage of $15 an hour. Governor Andrew Cuomo of New York is considering a state-wide wage increase in the fast-food industry, and is now being pressured to accept only high wage proposals.
Although this is good news for minimum wage employees that are struggling to meet basic necessitates, some opponents of the minimum wage increase believe this increase will be detrimental to small businesses and restaurants. Since California is unique (one of eight states) in requiring tipped employees to earn minimum wage already, some restaurant owners believe a higher minimum wage will force them to let go of a majority of their staff.
However, research on minimum wage increases demonstrates that higher wages actually increase labor productivity, and lower turnover rates, which consequently covers increased costs. The City Council has also promised to look into enacting service charges at restaurants to make up for the increased costs. The wage increase will be phased in over five years: $10.50 in July 2016, $12 in 2017, $13.25 in 2018 $14.25 in 2019, and $15 in 2020. Small businesses, or those with fewer than 25 employees, will have an extra year to carry out the plan.
Next, City Council will consider a law that could require annual wage increases to meet inflation. Wages would increase each year based on the 20 year average of Consumer Price Index. The language of the law is currently being drafted. If approved by City Council, it would go into effect in 2022.
In another victory for Fight for $15 advocates, California will begin to publish names of employers who have an excess of 100 workers on Medicaid, along with how much these companies cost the state in public aid. With companies that pay low wages in the public eye, advocates hope more companies will be pressured to increase wages, thereby ensuring that hard working individuals do not have to rely on public assistance to meet basic necessities.