WeHo’s Chamber of Commerce Sees Minimum Wage Increase on the Horizon

In a statement today about raising the minimum wage in West Hollywood, the WeHo Chamber of Commerce said it is not ready to take a position on the issue. But it acknowledged that an increase in West Hollywood is all but inevitable given votes by the L.A. County Board of Supervisors and the Los Angeles City Council to raise the minimum wage in their jurisdictions.

“New minimum wage laws have been put into effect in Los Angeles and will soon be implemented in L.A. County, creating significant political and economic pressure,” the Chamber said in its statement. “Many other surrounding municipalities will follow suit. West Hollywood is essentially a small island in the midst of all of these communities, putting our local business community at a significant disadvantage. The City of West Hollywood and the Chamber recognize that we must be at or near parity with our surrounding communities or risk losing the ability to recruit good workers and maintain stability in our workforce.”

However the Chamber said it couldn’t take a stand without seeing a concrete proposal from the city. “… the Chamber needs to see a balanced, thoughtful and well-executed wage increase proposal, which considers not only the needs of the employees, but also what the businesses need in terms of incentives, tax breaks etc., the overall benefit to the community, the special concerns of our hospitality industry with tip-wage earners, as well as the impact to non-profits.”

In its statement, the Chamber did say the Los Angeles City Council’s decision to raise the minimum wage to $15 an hour by 2020, an increase of 67 percent over the current state-mandated $9 an hour, “goes too far and too fast and will cause great harm to our small business community and restaurants.” The L.A. City Council’s increase applies to businesses with 26 or more employees. Those with 25 or fewer employees don’t have to meet the $15 wage minimum until 2021. The L.A. County Board of Supervisors last Tuesday voted to raise the county’s minimum wage to $15 by 2020. That would take place in a series of increases, with the wage going to $10.50 in July 2016, $12 in July 2017, $13.25 in July2018, $14.25 in July 2019 then to $15 in 2020. After 2020, both the L.A. city and county minimum wages would rise according to a formula tied to the Consumer Price Index.

The minimum wage issue has been on the City Council’s radar for some time now and political observers think a proposal to raise it or conduct a study to provide the data required to decide how much to raise it will be on the Council’s agenda this fall. Mayor Lindsey Horvath has been vocal in her belief that the city needs to establish a minimum now. The issue is likely to be a lively one, given that the city is dominated by small businesses, some of whom argue that they can’t afford a wage hike without laying off employees. At its meeting on July 20 the Council received an update from city staffers chronicling the decision by the L.A. City Council and the proposal under consideration, and later adopted, by the L.A. County Board of Supervisors.

It the report, city staffers said they are “preparing to have a comprehensive study conducted to identify the benefits and potential impacts of adopting a minimum wage policy. The comprehensive study will include an evaluation of the minimum wage policy on to the city’s current living wage ordinance, unionized workers, nonprofits, and micro businesses.” It noted that the Chamber has been gathering data regarding wages from local employers.  However Chamber President Genevieve Morrill told the City Council that her organization doesn’t have the resources to conduct the sort of study she thinks is necessary, which would include wages currently being paid in West Hollywood, with a primary focus on typically low-wage workers such as restaurant support staff, food service workers, laborers, housekeepers, store clerks and the like. As part of this study, Morrill said, city staffers should look at what benefits local employers are providing in addition to the wages paid

The moves by L.A. County and the City of Los Angeles to raise the minimum wage have brought forward a variety of issues. One is competition from nearby municipalities. While Santa Monica is considering a wage hikes cities Glendale, Pasadena, Santa Clarita, Torrance and Long Beach haven’t decided whether to follow suit. Small business owners protested the City of Los Angeles’s minimum wage decision, with some suggesting they might move their businesses elsewhere.

Another issue is enforcing a minimum wage. Some studies suggest as many as 80 percent of low-wage workers who work overtime aren’t paid what they are owed. Some West Hollywood businesses have adopted elaborate strategies for avoiding federal and state wage requirements.For example, one owner of several establishments has incorporated them separately and moves employees who have reached their 40-hour-a-week maximum from one shop to another so that he can have them work more hours without qualifying for a time-and-a-half wage. Also under discussion is whether to provide some exceptions for non-profit businesses. And the Los Angeles County Federation of Labor is asking the L.A. City Council to exempt its members from the minimum wage requirement.

In a story in the Los Angeles Times, Rusty Hicks, head of the federation, said that would protect the union against challenges to the ordinance asserting it interferes with the collective bargaining process. But some opponents of unions argue that they want to be exempt because the ability to pay union workers lower wages might lead some employers to be more accepting of unions, allowing those organizations to increase their membership.