Businesses in Los Angeles brace themselves as workers revel in the wage increase, starting July 1st
Los Angeles has become the latest city to test out boosting the minimum wage to benefit low-income workers, with over half a million residents due for an increase in wages.
The new law increased the minimum wage from $10.50 an hour to $12 an hour for all large businesses (defined as having 26 or more employees), and is another climb to the city’s goal of 15USD for minimum age employees by 2012.
In L.A., over half of the employees who will receive a higher minimum wage work in retail stores, healthcare, hotels, hospitality, and apparel or food-services.
Economists continued to argue about who benefited from the minimum wage. A new study published by the University of Washington studied the results of an increased minimum wage in Seattle reveals that businesses reduced both hours and available jobs for low-income employees, but higher income employment increased.
Minimum wage worker Angie Godoy, who has been working at a McDonalds in L.A for roughly three years, is one of the many celebrating the increase: “I’m just really happy to see it going up. Any increase in what I take home means I get to worry a little less. It’s one step closer to $15.”
Businesses coping with increased salaries
Chef and co-owner of the Nickel Diner in downtown L.A Monica May claimed the increased wages would make it difficult for her to maintain her business. She is expecting to reach 26 employees by 2018, stating: “Basically, our clock is ticking.”
Josh Loeb, a restaurateur and owner of six restaurants based throughout L.A., braced for the pay raise by gradually increasing the prices by small increments (50 cents to $1), but still had to terminate 15 employees.
Loeb, however, has upscale restaurants and stated he can afford to increase his menu prices. The restaurant owners that serve less expensive, non-gourmet meals will be hit harder.