More Questions Than Answers as Long Beach Minimum Wage Recommendations Deadline Nears

Yesterday, the Long Beach Economic Development Commission (EDC) began their preliminary deliberation of possible recommendations to be delivered to the council. It  was the first meeting of the Long Beach Economic Development Commission (EDC) since the conclusion of the public outreach effort that was part of the city’s quest toward a decision regarding increasing the minimum wage. 

That is, the commission's focus was on recommendations, until attention was turned toward a survey conducted with the support of area business improvement districts.

With the EDC’s recommendations expected to be presented to the council by mid-January, it appeared that the commission is still far from making any concrete recommendations to the council as they continue struggle questions like what is a “minimum wage,” instead of working toward an idea of how to address a possible wage raise in the city.

In the middle of their discussion on the future of wages in the city, the commission ceded the floor to an impromptu—and non-agendized—presentation of a survey commissioned by the Long Beach Council of Business Associations (COBA). The group includes the Downtown Long Beach Associates (DLBA), Bixby Knolls Business Improvement District (BKBIA), 4th Street Retro Row, the Long Beach Area Chamber of Commerce and four other business improvement districts.

Questions as to a potential conflict of interest were raised, given the EDC’s connection to COBA, as Commissioner Blair Cohn serves as the active BKBIA Executive Director and Commissioner Michelle Molina serves as the DLBA’s board chair. Whether or not they should have recused themselves from the discussion was not immediately clear, as no representative from the city attorney's office was present for the meeting—a custom for commission meetings of this kind, to help guide them through procedural issues and to avoid any legal or ethical violations.

The report concluded that a minimum wage raise to $12.50 per hour over five years was more palatable for area business owners than the proposed goal of $15. It also set out a number of exemptions in an effort to allow for small businesses and non-profits to “ramp up” before starting to feel the impacts of higher wages.

“We understand there’s momentum for increasing the minimum wage around the region and in some parts of the country, however, momentum alone should not be the reason to enact an ordinance,” said Senior Vice President of the Long Beach Area Chamber of Commerce Jeremy Harris, who was speaking on behalf of the survey's authors. “It should be data driven and testimony from those who bear the burden of the ordinance should be accounted for.”

In summarizing the COBA survey, Harris focused on the impact on businesses with less than 25 employees, a figure he estimated to represent some 90 percent of the city. Their recommendations to the commission were that in addition to the $12.50 per hour wage (including medical benefits, paid sick days and paid time off), there be a one-year delay for those small businesses with 25 employees or less, a two-year delay for non-profits and a “youth wage,” or provision to continue paying those under the age of 21 at the prevailing California minimum wage.

Harris also floated the idea that businesses in Long Beach be able to receive credits toward the minimum wage for paying above the minimum in benefits to their employees. For instance, if the state minimum wage was $10 per hour and a Long Beach business paid $2.50 in contributions above its obligations toward employee benefits it would be considered in compliance with the higher minimum wage.

The fact that so much time was dedicated to a survey that was not on the agenda and focused solely on the business community—the demographic surveyed in the COBA survey, who responded to prospects of possible wage increases with a resounding “no”—drew the ire of both attendees and Commissioner Robert Olvera, Jr.

“It’s one of those things where are we going to look at all reports and have an open mind or are we just going to look at those reports that we feel aligned with?” Olvera asked of the commission’s review of the COBA report.

He asked that the authors of the Economic Roundtable study released last month, a report with a much more person-centric view of a possible wage increase and the socioeconomic impacts those wages could have, be allowed to present their case before the EDC.

“Let’s be real about it, they’re absolute polar opposites and if we’re going to have a transparent discussion and be fair about the discussion and the decisions we make I think it behooves us to bring that study’s authors in and allow them the opportunity to present their study and have the commissioners question them,” Olvera said. “We should be able to interrogate both sides.”

The study Olvera referenced took into account those workers currently making under $15 per hour, showing that by the year 2020, when all the proposed raises would be in effect, nearly 54,000 workers would be affected by $15 per hour minimum wage. An invitation is expected to be extended to the study’s authors to attend the EDC’s next meeting to allow for a sort of equal air time for the competing documents.

The COBA survey found that an online survey of just over 400 businesses conducted by Long Beach-based S. Groner Associates showed support for both the $15 and $12.50 figures were very low, the latter had slightly more support among business owners.

The survey noted that because the respondents were part of the COBA business districts and volunteered to be part of the survey, a level of selection bias is present in its findings. In other words, the findings may be skewed and not representative of the business community as a whole.

Additionally, it found that organizations would “most likely” offset higher wages with increased prices or reduced employment, something that conflicts with the Los Angeles Economic Development Corporation’s city-commissioned, independent survey that found out of 600 businesses surveyed, only 3 percent of businesses said they would be likely to cut hours, 10 percent believed they would eliminate jobs and zero businesses thought it likely they would leave the city if it were to raise wages.

“The public has had months to respond to their findings and you know the figures based in their scientific sample which included 200 small business operator with 25 or less employees,” said Steve Askin, a “Fight for 15” advocate who studied minimum wage-related effects while earning a masters in accounting from Columbia University.

Before expressing his disappointment in the COBA survey not being made available to the public, even though the members of the EDC had already reviewed it, Askin said the survey’s recommendation to carve out exemptions for nonprofits in the city would be misguided. He pointed out that three out of the top 10 largest employers in the city, Memorial Healthcare and Saint Mary’s Dignity Health, are classified as nonprofits and their respective chief executive officers also take in annual compensations of over a million dollars.

This month, a separate survey of voters in the city showed that nearly 70 percent of residents support raising the wage to $15 per hour with no exemptions for nonprofits or small businesses. Emily Goodman of EMC Research, the firm that conducted the survey, said that their past work in cities like Oakland, San Francisco and more recently, Pasadena, has shown a large swath of support for higher wages.

“Every community is different, of course, but we’re really seeing widespread support for raising the wage and that’s in communities across California and in places outside of California that we’ve done work as well,” Goodman said.  

Which way the Long Beach community will lean could hinge on what comes out of the EDC’s next meeting, tentatively scheduled for January 6 at 3:00PM.

In the course of the discussion, some of the commissioners seemed to tip their hands as to what camp they supported, while others tried to hammer out compromises that included a wage lower than $15 per hour with later implementation dates. Some, including Molina, expressed their feeling that now is the right time to act on a higher wage, to avoid being superseded by a possible state or local ballot initiative, while others, like EDC Chair Frank Colonna, still had lingering doubts of the resiliency of the city’s businesses to absorb such a raise.

What he was certain of, though, was that the city council will act on the issue whether or not the EDC is able to hammer out recommendations before the anticipated January 19 vote.

“Personally, I don’t think that our city can weather the financial problems that we would incur, not only the businesses, but the city itself, in jumping into a 2020 $15 per hour matrix,” Colonna said.

[Editors Note: The story has been updated to include the Long Beach Area Chamber of Commerce as a member of COBA.]



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