Los Angeles poised to raise minimum wage to $15 an hour

Following the lead of other west coast cities, the Los Angeles city council appears ready to raise the minimum wage from $9 an hour to $15 an hour by 2020.

LA Times:

Workers are currently supposed to earn at least the California state minimum wage of $9 an hour, which will rise to $10 an hour in January. Under a plan endorsed by a key panel of City Council members last week, Los Angeles would increase its required wage year-by-year to reach a minimum of $15 hourly by July 2020.

Small businesses -- those with 25 workers or fewer -- would get an additional year to phase in the increases. Nonprofits that meet certain requirements could ask permission to do the same.

Under the plan, the wage requirements would continue to rise automatically every year starting in July 2022, based on the average increase in the consumer price index over the previous two decades.

The wage proposal would hike pay more slowly than some activists wanted. But leaders in the Raise the Wage Coalition nonetheless heralded it last week as a sound plan to improve the standard of living for low-income workers and their families.

Business groups such as the Los Angeles Area Chamber of Commerce and the Valley Industry and Commerce Assn. remain worried the hikes would hurt the economy and have been especially critical of the automatic, future pay increases as a threat to businesses.

Just how will throwing thousands of workers out of a job and closing hundreds of businesses, not to mention discouraging new businesses from forming, fight poverty? 

It won't.  Measures like this are guaranteed to increase poverty, create more government dependency, stifle economic activity, and lead to more youth unemployment.  The unemployment rate of young people ages 20-24 in LA is at an astonishing 57%.  Who is going to hire a kid for $15 an hour with no work experience and no skills, who is barely literate?  There aren't that many crazy business owners in LA who would make that fatal mistake.

Advocates for these "living wages" are giving false hope to the poor and those without a job.  That's because the drive for a $15-an-hour wage has nothing to do with reducing poverty; it won't.  It has nothing to do with increasing employment; it can't. 

The labor unions and their allies who are behind this effort don't care about the minimum wage except as it can be used to justify massive increases in the wages of union members already working.  Every hike in the minimum wage means that labor contracts will be negotiated using a substantially increased minimum wage as a baseline.  The larger companies who use union labor will simply pass on the increases to their customers.

Disconnecting the value of labor from the value of the product being made or sold is one of the worst economic ideas to be entertained in many years and will do nothing but exacerbate the problem of poverty for years to come.

Following the lead of other west coast cities, the Los Angeles city council appears ready to raise the minimum wage from $9 an hour to $15 an hour by 2020.

LA Times:

Workers are currently supposed to earn at least the California state minimum wage of $9 an hour, which will rise to $10 an hour in January. Under a plan endorsed by a key panel of City Council members last week, Los Angeles would increase its required wage year-by-year to reach a minimum of $15 hourly by July 2020.

Small businesses -- those with 25 workers or fewer -- would get an additional year to phase in the increases. Nonprofits that meet certain requirements could ask permission to do the same.

Under the plan, the wage requirements would continue to rise automatically every year starting in July 2022, based on the average increase in the consumer price index over the previous two decades.

The wage proposal would hike pay more slowly than some activists wanted. But leaders in the Raise the Wage Coalition nonetheless heralded it last week as a sound plan to improve the standard of living for low-income workers and their families.

Business groups such as the Los Angeles Area Chamber of Commerce and the Valley Industry and Commerce Assn. remain worried the hikes would hurt the economy and have been especially critical of the automatic, future pay increases as a threat to businesses.

Just how will throwing thousands of workers out of a job and closing hundreds of businesses, not to mention discouraging new businesses from forming, fight poverty? 

It won't.  Measures like this are guaranteed to increase poverty, create more government dependency, stifle economic activity, and lead to more youth unemployment.  The unemployment rate of young people ages 20-24 in LA is at an astonishing 57%.  Who is going to hire a kid for $15 an hour with no work experience and no skills, who is barely literate?  There aren't that many crazy business owners in LA who would make that fatal mistake.

Advocates for these "living wages" are giving false hope to the poor and those without a job.  That's because the drive for a $15-an-hour wage has nothing to do with reducing poverty; it won't.  It has nothing to do with increasing employment; it can't. 

The labor unions and their allies who are behind this effort don't care about the minimum wage except as it can be used to justify massive increases in the wages of union members already working.  Every hike in the minimum wage means that labor contracts will be negotiated using a substantially increased minimum wage as a baseline.  The larger companies who use union labor will simply pass on the increases to their customers.

Disconnecting the value of labor from the value of the product being made or sold is one of the worst economic ideas to be entertained in many years and will do nothing but exacerbate the problem of poverty for years to come.