Los Angeles City Council Approves Minimum Wage Ordinance of US$15/Hr

Los Angeles City Council Approves Minimum Wage Ordinance of US$15/Hr
Change happens Adam Bartlett/Flickr CC BY 2.0
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Minimum wage earners in Los Angeles could soon expect a pay hike. The city council has approved an ordinance rising their hourly wages to $15 per hour.


LA Mayor Eric Garcetti is expected to sign the ordinance on Saturday. Approved 12 to 1 by the City Council on Wednesday, minimum wage earners will feel the upticks in their salaries starting July 2016, initially at $10.50. It will then be succeeded by yearly increases to $12, $13.25, $14.25 and $15.

Overall, the pay hike represented a 66-percent jump in the minimum wage.

Companies with over 25 employees are mandated to adhere to the new rule in five years’ time, or until 2020, by applying it in small increments until hitting $15 an hour. Smaller businesses are given an extra year to comply.

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As expected, businesses are against the new rule, claiming it will force companies to layoff workers. Worse, the new pay hike could push the companies to relocate outside of LA where the business climate is more favorable. It is uncertain though if there remains a state in the United States that will not push the $15 per hour minimum wage. Before LA, Chicago, San Francisco and Seattle have approved the same mandate.

“They are asking businesses to foot the bill on a social experiment that they would never do on their own employees,” Stuart Waldman, president of the Valley Industry and Commerce Association trade group, told the New York Times. “A lot of businesses aren’t going to make it. It’s great that this is an increase for some employees, but the sad truth is that a lot of employees are going to lose their jobs.”

Although there are a number of large companies in LA, their headquarters however aren’t located in there. One is Walt Disney (DIS). Its headquarters is located in Burbank, Calif. While Disneyland is in Anaheim, Calif.

Apparel makers Guess (GES) and American Apparel (APP) will be forced to comply. Their worldwide employee count stands at 13,700 and 10,000, respectively.

Wages in the U.S. have been stuck at $7.25 an hour since 2009. “

Tens of millions of workers across America – 42 percent of the workforce – struggle to get by on less than $15 an hour,” Christine Owens, executive director of the National Employment Law Project, said.