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County calls for minimum wage study

LOS ANGELES — Following in the footsteps of the city, the county Board of Supervisors Tuesday commissioned a study on the impacts of raising the minimum wage.

Acting on a motion by Supervisors Sheila Kuehl and Hilda Solis, the board agreed to spend up to $95,000 to have the Los Angeles Economic Development Corporation review a series of studies performed on the city of Los Angeles’ proposal to raise the minimum wage to $13.25 an hour by 2017 and to $15.25 an hour by 2019.

“Today in this country we are seeing the highest wage and wealth gap in history, even greater than 1929, on the eve of the Great Depression,” Kuehl told her colleagues. “We live in a second Gilded Age”

The supervisors noted in their motion that 2.7 million county residents live in poverty, and nearly one in five residents cannot afford basic necessities of life.

Solis said conducting a study of a minimum wage hike “will help us determine the best way of bringing a higher standard of living to those earning a minimum wage, while ensuring that local and small business owners are not adversely affected.”

Kuehl and Solis asked that the economic development corporation pay particular attention to the effect of a wage increase on “mom and pop” businesses, citing census data finding that 76 percent of county businesses are “micro-businesses” employing one to nine workers.

Los Angeles city officials are still weighing the possibility of raising the minimum wage.

Supporters of the wage hike proposal say it will lift hundreds of thousands of low-wage workers out of poverty and that businesses are capable of absorbing the increased costs, while critics of the plan, including Supervisor Mike Antonovich, say it would drive out businesses and slow job growth.

Antonovich warned that entry-level jobs critical to gaining work experience would be lost if the minimum wage is increased.

A city-commissioned study done by UC Berkeley concluded that the benefits would outweigh the negative effects. While the wage hike would prompt businesses to pass costs onto customers, driving down consumer demand, it would be offset by $2.381 billion added to workers’ wages by 2019, which is expected to increase spending, the researchers found.

But a Beacon Economics report — funded by the Los Angeles Area Chamber of Commerce — found that the wage hike to $13.25 per hour would slow job growth by killing an anticipated 73,000 to 140,000 new jobs.

A labor-funded report released by the Los Angeles County Federation of Labor and conducted by the Economic Roundtable concluded that the wage hike would result in $5.9 billion in added income for about 700,000 workers in Los Angeles and create more than 46,000 jobs.

Supervisor Don Knabe called for public hearings in each of the county’s five districts to gather feedback on the idea from business owners.

A spokeswoman for BizFed, the Los Angeles County Federation of Business, which represents businesses with 3 million workers, said increasing the minimum wage is a misguided idea.

“If you care about poverty, this is clearly not the solution,” Elizabeth Shapiro said, telling the board that nonprofits who serve the needy would have to cut back programs if wages were increased.

Several representatives of business interests said a 50 percent wage hike over three years would be too much for businesses to sustain.

National Farm Workers Association co-founder Dolores Huerta, who was honored by the board as part of a celebration of Cesar Chavez Day, spoke in support of a higher minimum wage.

“Cesar was very committed to making sure that the working people … that pick our food … that clean our streets … that build our automobiles … are respected and honored” and able to support their families, Huerta told the board.

Only about 5 percent of the county’s 96,000 employees are paid less than $15.25 per hour, according to the supervisors’ motion.

However, all of the approximately 15,000 workers who service county departments through outside vendors make $11.84 per hour or less, not including health-care benefits.

The economic development corporation analysis will also consider how a hike in the minimum wage would impact welfare and food stamp programs for county residents. Kuehl said it was possible that a wage bump might even create “significant savings” for the county.

Supervisor Mark Ridley-Thomas wants the analysis to study the impact a change in the minimum wage has

on productivity, profitability and safety net expenditures.

He also wants the county to examine its own wage system.

“As the region’s largest employer, I believe Los Angeles County should lead the way in establishing a living wage for its contract workers,” Ridley-Thomas said. “The county must set its own house in order first by establishing equitable pay and standards that are based on actual costs of living, health care and what it costs to raise a family in Los Angeles. I will continue to work towards ensuring our contract workers’ needs are addressed.

The board’s vote was unanimous.

A report is expected back in 60 days.