The Los Angeles County Board of Supervisors continued their vote on the proposed minimum wage increase from their June 23rd meeting and will now hear the issue on July 21st. During the hearing it became obvious the supervisors were not equipped with all of the information they had hoped for. There were presentations and speeches delivered by Los Angeles Mayor Eric Garcetti, local business professors, small business groups, and the Los Angeles Economic Development Corporation. While the hyperbole in each of them was outstanding the substance in all of them lacked.
Four out of the five supervisors rebuked the LAEDC report to the fact they asked how such a large organization charged with the economic well-being of the county could not have done more extensive evaluation of the issue. Many of their requests focused on who they had actually surveyed, how the data could be accurate, and why other scenarios were not considered. The LAEDC report suggested that nearly two thirds of business owners felt the increase would have no appreciable impact on their business. Now as a business owner it is obvious a 66% increase in labor costs are going to have some impact.
Supervisor Kuehl stated “I do not understand how prices continue to increase at an accelerated pace but wages have remained stagnant”. Many in attendance spoke up and assured her that legislation, such as this bill, are a prime example of how the cost of doing business continues to rise. Every tax or fee increase we place on business causes prices to rise, such as Cap and Trade, business license increases, and so forth and so on. On the other side of the equation is the fact inflation has not far outpaced minimum wage. One of Supervisor Kuehl’s own presenters stated that if minimum wage had increased at the rate of inflation it would be at just over $11 an hour.
Supervisor Don Knabe was very vocal about the impact on small, businesses and how they are similar to a utility. While large corporations may be able to move their company out of state in order to maintain an operating margin small businesses do not have the same ability. In many cases they will forgo income themselves and focus on how to make the business work within its existing footprint. For a dry cleaner their customer is here and they would not travel with them to another state. To this point the LAEDC report was correct, they will not close their doors, but will they be able to make a profit is another question.
While the issue of the Los Angeles County minimum wage increase does not directly impact Manhattan Beach, indirectly it could have some major consequences. First up would be competing for entry level employees. The choice between potentially losing some of our employees to neighboring communities and paying them the same starting wage is a real one to consider. Secondly what would stop individual cities from following suit on the increase to $15 an hour?
Let your voice be heard on this issue and either make the time to attend the County meeting on July 21st or write your local Supervisor Don Knabe today. Ensuring your business has a voice is the only way to make a difference. The Manhattan Beach Chamber will be in attendance of the meeting but would love if we had a large group of our members standing side by side. We strongly support fair pay for a fair day’s work but also support economic prudence. Society is better off when we have a balance between residents, businesses, and government. When one tips too far there always has to be compensation by the other two.
Too learn more about the proposal please review:
- Los Angeles Times Piece: http://www.latimes.com/local/lanow/la-me-ln-county-minimum-wage-20150622-story.html#page=1
- Los Angeles Chamber of Commerce Research and Analysis: http://www.lachamber.com/clientuploads/pdf/Beacon%20Minimum%20Wage%20Report%202015.03.18_Final.pdf
- Manhattan Beach Chamber Piece: http://www.manhattanbeachchamber.com/2015/it-is-all-about-the-jobs/