L.A. panel was split over which minimum-wage analyst offered best bid
A panel tasked with choosing outside analysts to conduct a key review of two proposals to raise Los Angeles’ minimum wage split over which firm had the best bid, according to newly released city documents.
Officials released the records after a flurry of criticism over the selection of UC Berkeley’s Institute for Research on Labor and Employment to conduct the analysis as the City Council weighs the wage hike proposals. Business groups and other critics challenged the selection because the institute prepared an earlier, generally favorable analysis of Mayor Eric Garcetti’s plan to boost the minimum wage to $13.25 by 2017.
That study concluded that Garcetti’s proposal wasn’t likely to significantly hurt overall city employment. The new, broader study is supposed to analyze the potential effects of that plan and another proposal to boost the base wage higher, to $15.25 by 2019.
The fight over who should do the analysis comes amid a larger debate over the economic benefits and risks of raising the minimum wage. Garcetti and other backers argue that higher wages will help families and pump money into the local economy; opponents contend the hike will cost jobs.
Two city councilmen, Mitch O'Farrell and Felipe Fuentes, have argued that the city should redo the selection process to select “a neutral source.” But other city officials have defended the choice, including City Council President Herb Wesson, who recently said the UC Berkeley group was “the most knowledgeable and experienced bidder.”
Scoring sheets prepared by the City Hall selection panel show the Berkeley team got the highest overall score — an 88.8 out of a possible 100. That compared with scores of 86, 80.3 and 71.8 for three other bidders, Beacon Economics, Applied Development Economics and the Economic Roundtable, respectively.
One of the panelists who ranked Berkeley highest touted its “extensive experience.” But the records show panel members were divided in their assessments, with two of the four rating Beacon, which has performed economic studies for the city and business groups in the past, above the Berkeley team.
One of the panelists who ranked Beacon highest said its proposal “drills down to a level beyond request,” but another who gave it a much lower rating warned that the group “seems to focus on negative impacts.” The firm was previously contracted by the city to analyze hiking wages at large hotels and had warned of possible job losses.
The city did not identify the members of the selection panel, which included representatives from the offices of the chief legislative analyst, the city administrative officer, the economic development department and the harbor department.
The documents show that the bidders priced their proposals between $100,000 (the Economic Roundtable) and $43,000 (Beacon), although panelists questioned whether the latter included all presentation costs.
Beacon currently is working with the Los Angeles Area Chamber of Commerce, a group that opposes the minimum wage proposals, to analyze the possible effects of the plans. Councilman Curren Price recently invited the chamber and the county labor federation, a leading proponent of the wage increase, to provide lawmakers with their own studies on the pay proposals.
Amid a pitched national debate over increasing minimum wages, the Berkeley institute has faced criticism from conservative groups that argue its research is skewed. The Employment Policies Institute, a conservative think tank critical of raising base pay, has noted that researcher Ken Jacobs once served as co-director of the San Francisco Living Wage Coalition, which worked to increase the wages the city paid its contractors and recently backed upping the minimum wage in San Francisco.
The Berkeley institute’s director Michael Reich has also been criticized by the conservative group because he helped found the left-leaning Union for Radical Political Economics. Some local critics have chimed in: Ruben Gonzalez, vice president of the Los Angeles Area Chamber of Commerce, argued that when individuals have “a history of staunch, passionate and singularly focused advocacy in favor of wage regulations, they cannot be trusted to act as honest brokers sharing unbiased analysis.”
Jacobs said his work with the living-wage coalition took place more than a decade ago, and Reich said he hadn’t been involved “organizationally” with the Union for Radical Political Economics for more than 40 years. In a letter to the council, Reich wrote that the Berkeley institute’s research “meets the highest academic standards” and uses “state-of-the-art empirical techniques with rigor and objectivity.”
“Some outside commentators have nonetheless sought to impugn our work as biased, a claim that we rigorously and unequivocally reject,” Reich wrote.
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