A family-owned noodle maker agreed Friday to comply with the Los Angeles living-wage ordinance to secure City Council approval for a bond measure that will finance its expansion in South Los Angeles.
The 12-0 vote came only after an amendment in which Wing Hing Noodle Co. agreed to comply with the wage ordinance, despite the fact that it was exempt from the law because no city funds are involved. The amendment was sought by city officials, who say they are looking to expand use of the ordinance and exert more influence over wages paid by private companies.
The ordinance requires that city contractors or others receiving substantial city funding for economic development pay at least $8.97 in hourly wages. Although no city funds are being used for Wing Hing's expansion, Councilman Mike Hernandez had asked the company to comply with the ordinance given the city's role in issuing the bonds.
The company is pursuing a $4.3-million industrial development bond deal to expand its equipment and facilities and nearly triple its work force over two years. The bond program enables lenders to offer low-interest loans by giving bond investors a federal tax break. Although the city pays no money and takes no risk, as the bond issuer it has a say in whether to approve the projects, which are supposed to revitalize distressed neighborhoods.
Other companies have received industrial development bond financing since the living-wage ordinance was passed without amendments forcing their compliance with the law. But Hernandez said Friday that those companies said they planned to pay living wages for the jobs they were creating. In contrast, a report to Hernandez's Community and Economic Development Committee said that many of the entry-level jobs Wing Hing hopes to create would pay $6.25 an hour.
The committee's request that the company voluntarily agree to comply with the ordinance was applauded by living-wage advocates, who argue that any projects that rely on public assistance should not be creating low-wage jobs.
But critics warn that the requirement can be particularly burdensome to small companies operating in highly competitive industries with thin profit margins. Food processing is among those, burdened by high distribution costs and slotting fees.