Downtown business group: Changes needed in Garcetti’s wage hike plan

A business advocacy group says it might consider backing a boost to the Los Angeles minimum wage – but only if Mayor Eric Garcetti adjusts his plan to phase in wage hikes more slowly, allow lower pay for teenage workers and count tips and benefits toward pay requirements.

“We believe that amendments must be made to the current minimum wage proposal so that businesses can cope with this unprecedented mandate and smaller businesses in particular can prevent widespread layoffs,” the Central City Assn., which advocates for downtown businesses, said in a statement Friday.

Garcetti’s proposal would gradually hike the L.A. minimum wage from the California state minimum of $9 an hour to at least $10.25 in 2015, $11.75 in 2016 and $13.25 in 2017. Labor and some civic leaders have backed the plan as a way to pull Angelenos out of poverty.

But the Central City Assn. said the mayor’s recently unveiled plan needs “significant changes” before they can lend their support, including:

-- Phasing in the increases over a longer period of time. The business group argues the increase should take four years for bigger companies and seven years for smaller businesses and nonprofits.

-- Counting healthcare, pension and other benefits toward any pay requirements, and advocating for changes in state law so that tips could also be counted toward minimum pay.

-- Allowing lower wages for teenage workers “to help ensure they are not locked out of jobs.”

The business group also urged the city to accelerate plans to eliminate a city business tax and called on the City Council to abandon a separate proposal to increase the minimum hourly wage for workers at large hotels to $15.37.

Backers of that plan such as the Los Angeles Alliance for a New Economy, an activist group focused on labor and environmental issues, argue the industry has seen unusually strong profits recently and should share those with its lowest-paid employees. Hotel owner groups have complained it is unfair for the city to single out their industry and argue the proposal will put them at a competitive disadvantage.

Central City Assn. Chief Executive Carol Schatz also said any hike in the minimum wage must be coupled with efforts to attract and retain businesses in the city. Garcetti recently revealed that he and other elected officials are exploring the possibility of a ballot measure to replace the city’s gross receipts business tax with a different levy on companies. Details of that proposal remain unclear.

Follow @latimesemily for what’s happening at Los Angeles City Hall