Editorial:  L.A.’s $15-an-hour future

Nearly a million minimum wage workers are on track to get a raise to $15 an hour in 2020, now that both the city of Los Angeles and the L.A. County Board of Supervisors have adopted a new wage scale for the lowest-paid workers. The pay hike will help thousands in the city as well as in the county’s unincorporated areas who struggle to afford housing, transportation and education in one of the most expensive regions in the nation. The big question is whether the board’s vote Tuesday to match the city’s $15 wage will provide the critical mass needed to persuade other cities in the region to also raise their minimum wage, which would help lessen the confusion and competition created by raising the pay floor city by city.

The county’s unincorporated areas account for less than 10% of the county’s jobs, but the communities are interspersed throughout the region. There has been concern that cities that mandate pay hikes could become islands of high wages and lose business to surrounding, lower-cost cities. But a recent analysis suggests another possibility: Higher minimum wages in the city and county areas could put pressure on businesses in neighboring cities to raise their wages as well.

The Los Angeles County Economic Development Corp. conducted a survey of businesses around the county and found that 77% of businesses said they would expect to lose workers to employers in areas requiring the higher minimum wage. Some 66% said they were likely to match the higher wage in order to compete for workers. In other words, the 88 cities of Los Angeles County — whether they want to or not — are about to begin a grand experiment that tests how an unprecedented increase in the minimum wage can affect the local economy, business development and the lives of the working poor.

Given the magnitude of the pay hike ($15 an hour is 66% higher than the state’s current $9 minimum wage), it would be a mistake for the region’s elected leaders to impose it without acknowledging or trying to ease the potential negative impact on employers. Businesses may cut staff or hours to cover higher labor expenses, or they may be reluctant to hire unskilled workers. To their credit, Supervisors Hilda Solis and Don Knabe attached a Small Business Initiative to the county’s minimum wage plan that would offer assistance such as expedited permitting, training subsidies or reduced permit fees to employers by the time the first wage increase takes effect next July.

While adopting a higher minimum wage will help lift up some workers, it is by no means the solution to the region’s larger problem of poverty and lack of economic mobility. Metropolitan Los Angeles needs to create more good, middle-class jobs and invest in a workforce to fill them.

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