End of Public Hearings Pushes The Minimum Wage into Economic Development Commission's Court

Months of emotional and sometimes divisive public testimony over whether Long Beach should consider raising its minimum wage concluded last night with a hearing before the city’s Economic Development Commission inside the city council chambers.

With the public input portion concluded and the city-commissioned wage study in hand, the task of formulating recommendations to the city council for arguably one of the biggest decisions in recent history now rests with the 10 members of the commission.

The tenor of the night remained the same as it has since the public hearing process began a few months ago. Business owners in the city questioned the merits of raising the wages in Long Beach to what would amount to a 60 percent increase over five years if implemented. In fact, a handful threatened closures or relocations if the city adopts such an ordinance.

On the other side of the aisle, workers, non-profits and community organizers have matched business owners’ passion—and in recent meetings, overwhelmed their numbers—in stating that a minimum wage hike was necessary to improve the quality of life, if not the ability to live at all.

The commissioners asked pointed questions of Christine Cooper, the vice president of the Institute of Applied Economics of the Los Angeles Economic Development Corporation (LAEDC) who was on hand to present the findings of the study and field queries on behalf of the group that was commissioned by the city to figure out if raising wages in the city was feasible, and more importantly, what potential ramifications may ensue.

Commissioner Randal Hernandez, managing director for government relations with Union Bank, grilled Cooper over the cumulative impacts of not only a higher wage, but the higher payroll taxes and employer contributions to compensation plans that would accompany higher wages. Cooper said the group estimated that to be a 30 percent increase in addition to other wage-related taxes.

When asked why 15 became the magic number, and not 18, 20 or even 30 in terms of what was being advocated for, her response sounded more like a marketing theory than an economics one.

I think it's easier to advocate for fifteen than 14.50 or 13.50," Cooper said. "It's just a great number."

Steve Askin, a researcher for the Service Employees International Union (SEIU), said that despite the picture that some business owners have tried to paint over the past few months, the LAEDC survey, which included 600 Long Beach businesses, shows that few found it likely that higher wages would eliminate jobs (four percent) or that they would even cut workers’ hours (one percent).

The survey also revealed that zero percent of respondents were considering packing up shop and abandoning the city outright if it were to adopt a higher minimum wage.

“I would say that the survey actually offers some big surprises for anyone [who] says that raising the minimum wage will lead to mass firings, cuts in hours or would lead to a business exodus,” Askin said. “ What the survey shows is that really none of that is true if you talk to a majority or large sample of business people in this city."

That survey has been questioned in the media recently because of its failure to weight the survey data to coincide with the large chunk of the city’s businesses that are small, or having less than 20 workers. However, the LAEDC study showed that those-sized businesses represent roughly a quarter of employment. One-third of its survey included responses from businesses with less than 20 employees.

Some of those business owners threatening to turn to automation or move out of the city have been noticeably present at nearly every meeting, while reciting the same message of economic doom.

New voices present last night were Chef Paul Buchanan of Primal Alchemy and Lisa Ramelo of La Strada. Ramelo said that she doesn't think of her young employees as second class, referring to a call for an exemption to be made on youth employment if an ordinance is passed, but they still would be the first to go if wages went up.

"The first thing I would do other than raise prices like some other speakers have already said is, I would have to eliminate all my sixteen-, seventeen- and eighteen-year-old employees," Ramelo said. "I could never afford to pay them fifteen dollars an hour."

Before public testimony started Tuesday night, the commission voted to hold a future meeting in advance of the January 19 estimated date of when they might have recommendations ready to present to the city council. It’s anticipated that the discussion at the December 14 meeting, to be held at an undetermined location inside City Hall, will focus on the commissioners’ feelings on the issue, possibly hinting at any kind of recommendations that might surface in January.

Will a higher minimum wage lead to a mass exodus of employers from the city, as some business owners have promised? Or will an infusion of money into the pockets of low-wage workers, increasing their buying power, work to stimulate the economy, in particular small businesses, and mitigate some of the expected losses from a higher minimum wage ordinance?

The LAEDC study provides a lot of hypothetical scenarios, but states that the outcomes aren't certain, only likely. Some losses are expected, as some small businesses struggle to adapt to a possible wage ordinance. Some argue that's part of the normal cycle consistent with small business turnover.

There are also expected gains, with a stimulus effect expected to stem out of the availability of more dollars for spending in the local economy. However, the theories are noted as being just that, until an ordinance is implemented and the Long Beach economy begins to react to it.

Between now and its projected January completion date, the commission will have to balance the needs and wants of workers in the city with what they believe to be abilities of businesses in city to respond to an incremental wage raise, whether it be an end-goal of $15 per hour or another perhaps $12 per hour, like the ordinance passed in Sacramento earlier this year. It is an important decision that won't please everyone, but will most likely affect tens of thousands of workers, whether it is adopted or not.

The commission’s president Frank Colonna said as much, noting that it will be a “very interesting” series of weeks or months before a decision will be reached. He said the decision will hopefully be based on a formula that levels the playing field and works in the best interest of everyone.

“It seems like it’s going down to a matter of survival," Colonna said in his closing remarks. "It’s going to be up to us to find the best balance that we can without creating a negative affect if we can avoid it. Survival is as important as it is for people to feel they can work in their city and get a fair wage, and at the same time the individuals that are trying to survive with their businesses aren't compelled to either put themselves out of business or market themselves in a way that they won't have any customers."



Share this:


NEVER MISS A STORY