Los Angeles business leaders confirmed Tuesday that Mayor Eric Garcetti is circulating a plan to hike the city's minimum wage to $13.50 an hour over three years, followed in years after by hikes keyed to inflation.
Garcetti and members of his administration over the past two weeks have outlined the basics of the proposal, according to officials at two high-profile business groups. The minimum wage, currently set at $9 an hour, would rise by $1.50 a year for three years, said Gary Toebben, executive director of the Los Angeles Area Chamber of Commerce.
In 2017, a proposed new hourly minimum of $13.50 would continue to rise at a rate tied to the Consumer Price Index for the metropolitan Los Angeles area, Toebben said. The chamber executive said he was told that the goal is to eventually get the minimum wage to $15 an hour, an idea gaining momentum in the state and elsewhere.
Garcetti's team told Toebben and Stuart Waldman, president of the Valley Industry and Commerce Assn., that the mayor would unveil his proposal on Labor Day. "One of Mayor Garcetti's top priorities is to lift Angelenos out of poverty. In recent weeks he has met with business, labor, community and faith leaders to discuss ways to help LA families and our economy thrive," Jeff Millman, a spokesman for Mayor Eric Garcetti, said in a statement.
Toebben and Waldman characterized the mayor's plan as coming "out of the blue" with little input from the business community.
If approved, it would supersede other minimum-wage proposals that have been put forth in recent months by labor leaders and city officials, all seeking a wage of at least $15 an hour. A proposal by City Council members would raise the wage only for employers operating big hotels in the city, while the mayor's plan would affect all employers within city boundaries.
Both business groups have been busy in the last weeks filling their membership in on the mayor's proposal and will likely take a position on whether to support it. VICA is expected to vote on the plan Thursday, Waldman said.
The Los Angeles chamber will wait to see the specifics once the mayor unveils it, Toebben said. However, the first-blush response of the business community has not been positive, both men said.
A $4.50 increase over three years, on top of a $1-per-hour hike recently made statewide, is a "huge amount of money to expect a business to shoulder," Waldman said.
He predicted job losses due to businesses moving to locations with cheaper wages and possibly people forced out of their homes because they will no longer qualify for public assistance.
"Businesses will have to address the increased costs,'' Waldman said. "They will either increase their price or lay people off or move their business."
Labor leaders and progressive groups have for years been advocating for a higher minimum wage to help families cope with higher costs of living. The U.S. Congress, stymied by Republican opposition, has failed to act on repeated attempts to increase the minimum wage at the federal level.