Los Angeles has proposed raising the minimum wage in an effort to make the cost of living more attainable for everyone in the city. Yet restaurants, charities, and small theaters are saying that a $15 minimum wage for the region could put them out of business.
For restaurant owners, the issue stems from how they can pay their tipped workers, such as waitstaff, versus those who do not receive tips, such as hosts and kitchen staff.
But in wanting to ensure that they are fair to all workers, some employers worry they could look like they’re completely against the minimum wage — when they really just want to be able to stay profitable and be able to pay their employees.
“There is just no room for us to be able to afford this increase and stay in business,” restaurant owner Caroline Styne said to the LA Times.
Styne and others in the business contend that because tips already count as a wage, and are taxed as such, that they should stay that way even with the increase.
Even nonprofits are struggling to find solutions that will let them continue to improve the lives of others without maxing out their budgets.
One nonprofit, Chrysalis, helps provide work for those who have had trouble getting a job, including those who have been homeless or have criminal records. Jobs include cleaning up neighborhoods, answering phones and maintaining buildings, and the organization also provides them with training to help them transition to other jobs.
But for most of the clients working with Chrysalis, they would also need to receive a $3 an hour raise under the proposed law — that’s as much as $15.25 per hour.
Having fewer workers could also impact the ability to accept donations as area residents search for the best charities to donate to. For instance, charities in the U.S. help collect more than 14.3 million tons of clothing per year, but those numbers could go down if there are fewer charities in the area.
Additionally, many charities and other businesses that rely on government grants worry that their funding won’t quite fill in the gaps to cover the new wages.
Wendy Butts, CEO of the LA Conservation Corp, told lawmakers at a recent hearing that, although her organization supports a higher minimum wage, “We would be forced to reduce the number of program participants that we serve — the opposite of what all of us want to achieve.”
And even though groups like Actors’ Equity are pushing for higher wages, some community theaters may be unable to continue producing plays.
What’s more, some actors who work with those small organizations say that they don’t want an increased wage — especially if it will put them out of work.
Actors’ Equity represents 6,500 stage performers in the LA area along with thousands of others around the nation. The union wants to ensure that actors who receive stipends as low as $7 per performance are paid at least the state minimum wage of $9 per hour.
Yet small theaters like Sacred Fools in East Hollywood, which has under 99 seats and an annual budget of just $200,000, would be forced to stop working with Equity actors, said managing director Padraic Duffy to the New York Times.
Plays in these theaters are typically produced for between $5,000 and $20,000 — compared to $10 million to $15 million spent on one Broadway musical.
Still, some actors, like Christian Barillas, do support the decision to raise wages.
“It’s so weird to be doing the work and not get paid, and it’s totally unsustainable,” Barillas said.