It has long been obvious to all but the most conservative politicians and retrograde business lobbyists that this raise is long overdue. The billionaire investor and philanthropist Eli Broad has signed on, observing in a Labor Day op-ed in The Times that the increased wage "would be a great boost to our local economy. Workers would spend their higher wages on groceries, clothes and other basics for their families, putting the money right back into local businesses, which would, in turn, create jobs."
By 2017, the affected workers would have a cumulative $1.8 billion more to spend. That's according to a study Garcetti commissioned from the Institute for Research on Labor and Employment at UC Berkeley.
Garcetti's proposal would raise the minimum in steps, starting at $10.25 next year and $11.75 in 2016. After 2017 the $13.25 wage would be indexed to inflation. It would keep a hop ahead of the state minimum wage, which is $9 now and will rise to $10 in 2016.
And it would be well ahead of the federal standard, which is mired at $7.25. That's 25% below the minimum wage's inflation-adjusted value in the 1960s; the proposal before Congress to raise the federal minimum to $10.10 still wouldn't make those workers whole.
L.A. would join 14 other cities and counties that have raised their own minimum wages, many of them in the last year or two. Leading the movement is Seattle, which enacted a $15 minimum this year. In California, San Jose voters approved an inflation-linked increase in 2013 that currently sets the minimum at $10.15, and the San Diego City Council this summer approved an increase to $11.50 by 2017. Measures to raise the minimum to $12.25 in Oakland and $15 in San Francisco are on those city's ballots for November.
While it's tempting to dismiss minimum-wage workers as teenagers, the Berkeley study shows that isn't so: only 3.2% of affected workers (including those benefiting from the ripple effect) are 18 or 19, while about 60% are between the ages of 20 and 39. About a third are married. Nearly two-thirds are Hispanic. Half earn twice the federal poverty level or less, and on average they bring in about half their family's income. And more than two-thirds are full-time workers.
Will the higher minimum drive jobs out of the city? As we've reported before, decades of research have failed to establish a significant negative employment effect from the minimum wage -- and whatever effect exists is more than compensated for by improvements in overall income.
It makes sense that communities in California and the West have taken the lead in raising the minimum wage. They're high-cost communities, where the average dollar doesn't go as far as it does in Midwestern locales such as Kansas and Missouri (see the accompanying map from the Tax Foundation). Although wages and prices tend to move roughly in tandem, the gap between the top and bottom tends to be wider in high wage -- and price -- regions.
To put it another way, minimum-wage workers fall farther behind the rest of the working class in purchasing power over time; that's what justifies moving beyond the one-size-fits-all federal minimum.