Los Angeles Residents Divided Over Proposed $15 Minimum Wage

Feb 9, 2015
Originally published on February 12, 2015 3:43 pm

Los Angeles is considering raising its minimum wage to $15 an hour, from $9 currently. The dramatic proposal is causing excitement and some anxiety.

San Francisco and Seattle have already passed a $15 minimum wage (they'll rise to that level over the next few years), but what's different in LA is the number of working poor in this huge city.

There are an estimated 800,000 people in Los Angeles living below the federal poverty line, and more than 500,000 workers earning the minimum wage. One of them is Samuel Homer.

"It would make a big difference for me," Homer says.

Homer is 20 years old and works at a Burger King in South LA, where he's putting himself through Southwest College. He doesn't have a car, which makes life in LA pretty tough. Some days he hardly has enough money for bus fare, let alone tuition.

"It's definitely hard to pay a lot of bills, and it's hard for me to get hours while I'm still in school," he says.

So the $6 an hour bump that's being discussed at city hall would be a big deal for someone like Homer. It would also be a big deal for one of his neighbors, who is a whole lot less enthusiastic.

Chris Player, owner of a small café called C.W. & Chris Fish and Chicken, says if the wage hike goes through, he would have to do one of two things. "We would either have to lay off the paid employees, and it would just be family-ran, or we would definitely have to increase the price," he says.

His cafe is on a worn stretch of Western Avenue, home to a number of mom-and-pop-type local businesses. He opened in 1992, a week before the LA riots.

"I'm afraid for most businesses around here that actually have to pay a lot of employees, that they would go under," Player says.

The business community, anxious over the minimum wage hike proposal, has predicted that mom-and-pop companies like Player's will have to absorb millions in extra costs.

This could be especially acute, they say, in neighborhoods where unemployment is already high. Most of South LA isn't affected by the current economic booms in nearby downtown and Hollywood.

According to Council Member Bernard Parks, there are only 20,000 jobs in his district of 250,000 residents.

"Every minimum wage increase that we've seen, if it's too high, causes unemployment," Parks says.

Some cities that have raised minimum wages have seen pretty negligible impacts on employment. But another thing to consider that makes the debate and proposal in Los Angeles unique: No major city has tried to raise its minimum wage this fast or this much all at once.

Economists who study minimum wage increases are pretty well split on what the impacts would be if a $15 minimum goes through in LA. But there's general agreement that the city's next move will be watched closely around the country.

"We have no experience with leaps like LA is talking about," says David Neumark, director at the Center for Economics and Public Policy at the University of California, Irvine.

Chris Tilly, an economist at UCLA, says to think of LA as if it were a state.

"If LA takes this step, that's going to be something that all kinds of government units across the country are going to take note of, even if the federal government remains paralyzed on this issue," Tilly says.

In many ways, LA does face issues on the same scale that many states do. There are 4 million people inside the city limits, with big gaps between the rich and poor. So the repercussions of a policy decision like this — good or bad — could be huge.

It's one of the reasons why Mayor Eric Garcetti and the City Council have now delayed acting on the proposal, deciding instead to commission another study.

"If you have a big city like LA doing something, you're going to find a lot of people will fall in line without any thought, because they believe that we've done the research," Parks says. "The fact is, we have not done the research."

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ROBERT SIEGEL, HOST:

To Los Angeles now and a proposal to raise that city's minimum wage. It could go as high as $15.25 an hour, a big increase from the current California minimum of $9 an hour. And it could happen relatively fast. As NPR's Kirk Siegler reports, a $15 minimum wage is generating excitement and some anxiety.

KIRK SIEGLER, BYLINE: Los Angeles wouldn't be the first city to pass a $15 minimum wage. San Francisco and Seattle have already done it. But what's different here is the sheer size of the city and the number of working poor. There are an estimated 800,000 people here living below the federal poverty line and more than 500,000 workers earning the minimum wage - more than half-a-million people. One of them is Samuel Homer.

SAMUEL HOMER: Yeah, it would make a big difference for me.

SIEGLER: Homer is marching at this union-sponsored 15 in 2015 rally you can hear in the background. He's 20, works at Burger King and is putting himself through college. He doesn't have a car, which makes life in LA pretty tough. And some days, he says, he hardly has enough money for bus fare, let alone tuition.

HOMER: It's definitely hard - hard to pay a lot of bills, you know, and it's hard for me to get hours while I'm still in school because there's two things I have to focus on, you know, the money that I have to, you know, have to, you know, feed myself and help out with my family, and then there's money that I need for my school.

SIEGLER: So the $6 an hour bump that's being talked about in some corners of City Hall could be a big deal for someone like Homer. It would also be a big deal for employers. If the minimum wage were to go up by $6 across the board, we're talking millions of dollars more in costs to be absorbed by businesses.

CHRIS PLAYER: We've been here since 1992. Actually, we opened up a week before the LA riots.

SIEGLER: And you can imagine people like Chris Player are pretty anxious.

PLAYER: We would have to go two routes. We would either have to lay off the paid employees and then it'd just be family-ran, or we would definitely have to increase the price. Player owns this small cafe called C.W. & Chris Fish and Chicken. It's on a worn stretch of Western Avenue in South LA. He's mopping the floors and getting ready for another busy lunch rush.

PLAYER: I'm afraid for most businesses around here that actually have to pay a lot of employees - that they would go under.

SIEGLER: Bernard Parks represents this neighborhood on the City Council. It has some of the highest crime rates in the city. Unemployment is high as well. His neighborhood isn't getting touched by the booms happening right now in nearby downtown or Hollywood.

BERNARD PARKS: We only have 20,000 jobs in my district. Every minimum wage increase that we've seen - if it's too high, it causes unemployment.

SIEGLER: Parks supports raising the minimum wage, but he worries the conversation in LA right now is moving too fast.

PARKS: If you have a big city like LA doing something, you're going to find a lot of people will fall in line without any thought because they believe that we've done the research. The fact is, we've not done the research. And the harm that we'll do to our business community is unconscionable.

SIEGLER: Parks' frustration is rooted in the fact that no city or state has yet looked to raise its minimum wage as fast or as much as what's being talked about here, a potential $6 increase all at once. Economists are split over how big of an impact this will have on businesses, but there's general agreement that LA's next move is going to be watched closely around the country. Chris Tilly directs the Institute for Research on Labor and Employment at UCLA.

CHRIS TILLY: LA is the size of a state. If LA takes this step, that's going to be something that all kinds of government units across the country are going to take note of, even if the federal government remains paralyzed on this issue.

SIEGLER: In a lot of ways, Los Angeles does face issues on the same scale that many states do. There are 4 million people inside the city limits, big gaps between the rich and poor, so the repercussions, good or bad, of a policy decision like this could be huge. It's one of the reasons why Mayor Eric Garcetti and the City Council have now delayed votes on the matter, deciding instead to commission another study. Kirk Siegler, NPR News. Transcript provided by NPR, Copyright NPR.