Long Beach City Council Approves $13 Minimum Wage With "Pathway" to $15 by 2021

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Workers and community organizers hold signs supporting a $15 minimum wage during the January 19 hearing. Photo by Jason Ruiz.

As the discussion to raise the minimum wage in Long Beach slogged into its sixth hour and Tuesday night slowly became Wednesday morning, Vice Mayor Suja Lowenthal described the economic tyranny that poverty can apply to those stuck in its grip.

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She debunked the idea that rising wages purely serves as a function of inflation and lacks the power to pull people out of poverty. She compared low-wage laws as a de facto government subsidy to low-wage employers and dismissed the notion that her position was based on emotion and political leanings, rather than fact.

The vice mayor then unraveled a multi-part plan to adopt the core of the recommendations sent to the city council by the city’s Economic Development Commission to increase the minimum wage to $13 an hour by 2019, but also added provisions for a “pathway” to $15 an hour by 2021.

“It is paying someone the worth of the work that they do,” Lowenthal said of the higher minimum wage. “When everything else goes up in price, the minimum wage does not. And we know that everything else has gone up in price and the minimum wage has not, and we have to ask ourselves the question, ‘What kind of city and what kind of living environment do we expect our residents and workers to live in?’” 

Lowenthal’s motions each passed by a 6-2 vote, with councilmembers Stacy Mungo and Daryl Supernaw providing the dissenting votes. The vote will increase the minimum wage in the city to $13 per hour by 2019 with a one-year exemption for small businesses with less than 25 employees and all nonprofits. The vote will place all city departments on the same schedule, which will increase the minimum wage to $10.50, $12.00 and $13.00 in the next three Januarys. It will also place the impetus of enforcing those wages on the city and establish a fine schedule for those businesses found in violation.


 

The second part of Lowenthal’s proposal called for a second study, which was agreed to be put out to bid instead of seeking out the services of the Los Angeles Economic Development Commission for a second time, that would assess the affects of the higher wages in Long Beach in early 2019. If that study finds no “significant negative impacts” to jobs or the city’s economy, Lowenthal’s motion calls for the city to continue on the path to $15 by 2021. After that point, wages would potentially be set according to the Los Angeles region Consumer Price Index.

The pathway part of Lowenthal’s proposal mirrored a recommendation put forth Thursday by the city’s Human Relation Commission that called for the opportunity to expand to $15 per hour. In a letter to the city council that was read during public comment by Commissioner Veronica Quincy, the commission outlined the impacts poverty has on people of color in the city and its links to their health, well being and safety.

It pointed to Long Beach being a leader in passing Measure N to pay hotel workers higher wages in 2012 and asked the council to show the same leadership in providing working families with a $15 an hour minimum wage as soon as economically feasible. That wage mark has been shown in studies to be the least amount needed for a single family to afford basic necessities.

“As a commission we care very deeply about issues related to human dignity and certainly the minimum wage increase falls within that purview,” Quincy said. “So we wanted to make sure that we as a commission were very vocal about this important piece of potential legislation. This is actually the first time since I’ve been a commissioner that we have addressed council with a formal letter because we felt so strongly this was an issue of importance for the city.”

The commission is chaired by Jeannine Pearce who was at the center of the fight for hotel workers’ wages and is vying to replace Lowenthal as the Second District council representative.

Lowenthal quickly found support for her proposals among her colleagues, with most voicing outright support for the motions, and others, like Eighth District Councilman Al Austin, leveraging to include friendly amendments for a new workers’ exemption that would allow employers to pay interns or workers new to the field 85 percent of the minimum wage for maximum of six months or 480 hours. An amendment from Fifth District Councilwoman Stacy Mungo that aimed to add exemptions for workers who are hired under the Workforce Innovation and Opportunity Act was declined.

The evening’s hearing was not unlike those held over the past few months since the council took up the issue in August, with business owners, specifically from the restaurant sector, claiming that higher wages would lead to higher prices or worse, facing off against employees that urged the council to adopt an ordinance to help alleviate some of their economic burdens.

There were tearful testimonies from mothers working multiple jobs and foregoing time with their children to put food on the table. There were students imploring the council to act on low wages so they could afford textbooks and tuition, so they, too, might someday be crafting legislation from behind the dais. One woman’s explosive commentary was punctuated with her telling Mayor Robert Garcia to “shut up” before she turned to the crowd shouting for a recall of Garcia.

From the business end, there was the static dialogue that higher wages would increase prices, which would, in effect, negate any kind of benefits the council might be trying to bestow on low-paid workers. They warned that businesses could fold or simply pack up shop and head to surrounding municipalities with lower wage laws.

James Stephenson, the managing partner at Bo-Beau Kitchen + Rooftap on Pine Avenue, was part of a small chorus of those, including some members of the city council, calling for tips to be included when computing the total earnings of an employee. He noted that Bo-Beau only pays their tipped employees the current minimum wage of $10 per hour, while the back-of-house employees are generally paid somewhere between $11-$14 per hour. At the same time, Stephenson said the tipped employees could make upward of $25 per hour when counting tips.

City Attorney Charles Parkin said while there is no legal precedent for or against the inclusion of tips in calculating total earnings, it was was his belief that if the city were to adopt that stance, it would most likely find itself in litigation for the “foreseeable future.”

The night was littered with numbers, statistics and graphs, with perhaps the most striking figure coming out of an exchange between Ninth District Councilman Rex Richardson and Assistant City Manager Tom Modica regarding the poverty line. The federal figure stands at $24,250 for a family of four, however, Modica said that when adjusted to the Long Beach area using the area median income, that figure should be closer to $75,000.


 

Richardson’s quick math showed that even with two people earning $15 per hour, that amounts to just over $62,000 per year for a household. He noted that earlier presentations from the LAEDC showed average expenditures by Long Beach households is just over $69,000, meaning a raise to $15 wouldn’t serve as a solution, but a tool that would help close the gap and potentially lower the amount of the city’s residents who live in poverty. According to the LAEDC study that figure is over 17 percent.

“If someone works at $15 an hour, it doesn’t get you out of poverty,” Richardson said. “This is by no means a living wage, but it does help put you on the path to get you out of poverty.”

The path out of poverty may have started with last night’s vote, but only time will tell if the “Long Beach Way” will be the rising tide that “lifts all boats,” or if the business community was right that a move to raise the pay for workers in Long Beach punctured the hull of its economic vessel.

The second report, set for a special meeting in early 2019, will assess the impact of last night’s action taken by the council and dictate whether or not Long Beach joins the likes of the City of Los Angeles, Los Angeles County, and more recently, Santa Monica in continuing toward a $15 per hour wage.

In his closing remarks, Austin noted the “sticker shock” that may have hit those with the “Fight for $15” but said the phased-in approach would be consistent with incremental wage raises seen in the past. And because it is an ordinance, the council could—if it has the appetite for another Wednesday morning vote on wages—amend it.

“I don’t think we necessarily have to get it all right this evening,” Austin said. “ The last time I checked, this will be an ordinance and on any given Tuesday we can change an ordinance. We can tweak an ordinance, we can fix an ordinance, we an improve our policies. I think this is a great first step for the City of Long Beach to move and show commitment to the workers throughout our city.” 



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