L.A. Becomes the Largest City to Boost Minimum Wage

Will other major cities follow?

Hotel workers cheer after the Los Angeles City Council voted to increase minimum wage to $15.37 an hour on September 24, 2014. (Mario Anzuoni / Reuters)

Tuesday’s vote to raise Los Angeles’s minimum wage to $15 an hour by 2020 is being called “the most significant victory so far” in the push to increase the minimum wage nationally. The City Council passed the ordinance 14-1, which will boost the current minimum of $9 in roughly $1 increments annually over the next five years. The first increase would happen in July 2016, boosting minimum wage to $10.50 an hour.

The response hasn’t been completely positive. While labor unions and supporters of the wage increase are displeased that the ordinance will take place piecemeal over five years, small business owners—who have until 2021 to comply—complain that the nearly 50 percent increase will hurt their bottom line.

“The impact of the council’s endorsement of a $15 minimum wage is huge. Analysis of a similar earlier proposal, raising the rate to $15.25 by 2019, found that more than 600,000 workers—over 40 percent of the L.A. workforce—would ultimately benefit from the increase,” says Christine Owens, executive director of the National Employment Law Project, in a statement.

The bill in its current form includes tipped workers—meaning that tips would not count towards the proposed minimum-wage base pay of $15. Currently California is one of seven states that include tipped workers among regular minimum-wage workers, and they too would benefit from the pay bump. But restaurant industry representatives have expressed concern, namely that they expect some restaurants with thin margins to close once the new wage standards kick in.

The question of whether cities should have different minimum wage than states or the nation has been an ongoing one. The trend has picked up popularity since Santa Fe and San Francisco enacted a higher wage than the federal minimum in 2003, with six major cities increasing wages to above the $10 mark in the coming years.

Councilman Paul Krekorian says: “Today the City of Los Angeles, the second biggest city in the nation, is leading the nation.”

In New York, Governor Andrew Cuomo has sought to increase the minimum wage for fast-food workers while Mayor Bill De Blasio has called for minimum wage to be raised to $15 by 2019. Nationally, congressional Democrats are looking to increase minimum wage to  $12 by 2020.