Above photo (stock) Commissioners Walter Larkins and Robert Olvera Jr. Photos by Mike Varela @m1k3Vx.
Long Beach Economic Development (LBEDC) Commissioner Michelle Molina balled up her fists, holding them out in front of her in a pugilistic pose, ready to defend her assertion that a raise in wages should not be postponed. While the pose was struck in jest, it was highly symbolic of the struggle for the “Fight for 15,” as workers and businesses owners—and the EDC commissioners themselves— have been considering their positions of how high wages should be in Long Beach for months now.
After months of deliberations, presentations and hours of public testimony, the EDC reached its recommendations deadline Wednesday night before they’re set to be reviewed by the city council and could be voted on as early as the end of the month. The bulk of recommendations stem from a motion proposed by the commission’s chair, Frank Colonna, that the minimum wage in the city be $13 by January 1, 2019, with a one-year exemption for nonprofits and small businesses, defined as having less than 25 employees.
The recommendations call for incremental raises over three years, with the minimum wage increasing to $10.50 by January 1, 2017, $12.00 by January 1, 2018, and ending at $13 at the start of 2019.
Other recommendations that will be passed to the council include considerations of whether or not sick days and wage theft enforcement are items that will be adopted with a potential approval, the implementation of a review process for the effects of a higher minimum wage policy and if there will be an exemption for youth employment that will allow employers to pay them the state minimum wage of $10 instead of whatever the city minimum might become.
“I believe that a minimum wage policy in Long Beach is the right thing to do, however, any policy needs to be established and implemented in a way and at a level that maximizes the positive impacts while minimizing the negative impacts,” Colonna said.
The recommendations came at the close of a nearly five-hour long meeting that included presenters from the Los Angeles Economic Roundtable, which presented on the socioeconomic impacts of a $15 per hour wage, and from the Long Beach Council of Business Associations which had previously pitched a compromise of sorts on the minimum wage topic in asking the commission to recommend a $12.50 per hour wage.
A city staff memo estimated that 219 full time equivalent (FTE) employees currently work for the city and make less than the $15 per hour mark that started the exploration of wage raises in the city. It also estimated that in order to bring those employees up to par by the end of a five-year raise schedule, it would cost the city $1.5 million annually by the 2021 fiscal year. A raise to $13 per hour by 2019 would slash that cost to about $850,000 annually.
Not everyone on the commission was on board, which led to Colonna’s first motion failing to garner the 5 votes necessary to pass.
One point of contention was the recommendation to the city council that small businesses be defined as those having 50 employees or less. Molina pointed out that if this were the case, under the proposal some 9,000 businesses in the city would be granted the one-year delay raising wages, leaving only the largest employers subject to raising theirs. It was also criticized for using the same basic raise schedule that Los Angeles has implemented without the final two steps to get to $15.
Some members argued that setting the threshold too low would encourage businesses to stop growth in an effort not to eclipse the cutoff point. Others argued that the recommendation should be to continue to wait on the issue while neighboring cities and their potential growing pains could be more thoroughly examined.
Commissioner Randal Hernandez proposed that workers earning tips should have that additional money incorporated into their base pay, something that state law prohibits. Hernandez also asked that the city postpone any kind of action on minimum wage hike and wait until 2021, after Los Angeles and the rest of the county had reached the $15 per hour mark, so the commission could better understand regional impacts and how Long Beach might be affected.
“I think that’s the appropriate time to take a step back and say ‘okay, how is Long Beach fairing in this whole regional effort,” Hernandez said. “We’re not an island. Is it doing better? Worse? What are some of the unintended consequences?”
The inability to create any kind of uniform front led to the failed vote of Colonna’s first motion and drew the ire of Commissioner Robert Olvera, who along with Molina, has been a outspoken supporter of higher wages, and on multiple occasions has shot down ideas that would’ve further constricted implementing higher wages in Long Beach.
“We talked about compromise but there doesn’t seem to be any compromise in some of the other commissioners,” Olvera said. “And with all due respect, are we here to find more reasons why we can’t do something to help low-wage earners or are we here to find a way to do it?”
Like other commissions, and the recommendations made by those bodies to the council, the list of things approved last night could fundamentally change during council deliberations. Last year, the Medical Marijuana Task Force devised a list of nearly 50 recommendations for the council to consider in its bid to craft an ordinance for the city. However, those recommendations were largely tossed out in favor of policies that had been crafted at the state level.
The state minimum was just increased to $10 when the calendar year began last Friday. Some business owners expressed concern that, combined with the state’s current increase in its minimum wage, a raise in Long Beach could make them less competitive or even put them out of business.
“It’s only been eighteen months since the minimum wage was at eight dollars an hour. It’s gone up two dollars an hour in the last eighteen months,” said Domenico’s owner Mike Rhodes. “I don’t know about everyone else but I'm fighting like heck to try and figure out how to cover that increase.”
Yanki Greenspan, chairman of the Uptown Long Beach Business Association echoed those concerns, stating that multiple businesses that he represents have had price concerns in an effort to balance their books.
“I watched businesses talk about how this discussion has already caused them to increase their prices,” Greenspan said. “A lot of the discussion there was about raising the cost of food, raising the cost of entry for various things.”
The cautions displayed by the commission lie in their concerns that the economy has a delicate balance and a potential raise in wages could upset that balance. Commissioner Blair Cohn said he had reservations of what a wage raise could do for the development of business in the city that touts itself as being “business-friendly.”
He cited recent expansion of Lola's into Bixby Knolls and the downtown area developments, stating that he was hopeful that higher payroll costs wouldn’t slow down or force businesses to cancel those plans altogether. He conceded though that with such a polarizing topic, not everyone is going to get what they want.
The $15 minimum wage that workers and labor groups have wanted from the outset of the discussion has been cast as highly politicized by some, with members of the public asking the commission to remove the political calculus of the issue when considering the impact on the city and its residents.
However, it's the impact that low wages and having to hold multiple jobs have on the city's residents that concerned Molina. Eliminating road blocks to success, like language barriers, educational constraints and job skills, she said, could make a minimum wage discussion a non-issue.
"I think the bigger issue is no matter what we decide to recommend, I really make a very impassioned plea to include ongoing discussions as part of this commission or any commission about how we can help with those road blocks to success," Molina said. "To me this is a much bigger issue than how much you make per hour, but it’s how do we help people be more successful in our city and how do businesses benefit from that as well."
The council is expected to continue the discussion on the topic January 19, where it will weigh the recommendations voted on by the EDC last night and potentially vote on the future of the minimum wage in Long Beach.