Op-Ed: Hiking L.A.’s minimum wage is a win-win


Of all major cities in the country, Los Angeles has the highest percentage of population living in poverty. After decades of slow job growth and stagnant wages, 28% of Angelenos — 1 million people — today live below the poverty line. Our city’s African American and Latino residents face disproportionately higher rates of poverty. The situation is heartbreaking and unconscionable.

That’s why I’m supporting the plan that Mayor Eric Garcetti announced Monday to raise the minimum wage to $13.25. The men and women earning minimum wage deserve, at the very least, a paycheck that enables them to support their families. An increase in the minimum wage would not only be good for low-wage workers. It would also be good for the city, good for the economy and, in the long term, good for business. It is, simply put, the right thing to do.

Supporting a family with a minimum-wage salary — or even two such salaries — has become increasingly difficult in recent years. Los Angeles’ poverty line is $30,000 for a family of four with at least one full-time and one part-time wage earner. If you are someone who earns more than that, think for a moment about how difficult it would be to find a decent place to live, feed your family and pay for health insurance, child care, transportation and utilities — much less save for retirement, birthday presents for the kids or a rainy-day fund — on $2,500 a month before taxes. The sad truth is, many families in Los Angeles survive on even less.


Across the country over the last several years, wealth and income gaps have widened even as the economy has ticked upward since the recession. Those in the top 1% have seen their bank accounts grow dramatically, while the bottom fifth have either seen incomes decline or remain steady. As someone fortunate enough to have lived the American dream, I’m deeply troubled by that.

Increasing the minimum wage is a start. Garcetti proposes to increase the minimum wage so that it reaches $13.25 by 2017 — and ideally $15 an hour not long after. In the very short term, 600,000 people would be lifted out of poverty, and wages could rise as much as $6 billion.

Those increased wages 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.

That’s why I don’t agree with some business leaders who say higher wages will cost jobs or hurt business. In fact, this year 600 economists — including Nobel laureates — signed a letter supporting a federal minimum-wage increase and citing as evidence studies that show increasing the minimum wage has little or no negative effect on employment of minimum-wage workers and could stimulate the economy.

There are upsides and downsides to any action as significant as raising the minimum wage, but I believe the individual, economic and civic benefits far outweigh any negatives.

My family moved to Los Angeles in 1963 because we saw it as a city of opportunity, and we still do. But to keep delivering on its promise, Los Angeles must be a place where workers can earn a decent living and lift their families out of poverty and into the middle class. Seattle has already approved an increase to $15 an hour by 2017, and San Francisco residents will vote on a similar measure this fall. Los Angeles should join them and help catalyze a statewide increase in the minimum wage.


Of course, raising the minimum wage is not a solution to the struggles that Angelenos in poverty face — from making sure their children receive a high-quality education to keeping their families safe from violence and crime. But it is fitting that the mayor chose Labor Day not only to celebrate hardworking Angelenos but also to send the message that their hard work will pay off — for them and for this great city.

Eli Broad is founder of the Broad Foundations, KB Home and SunAmerica.

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