Amid several minimum wage increases taking place nationwide, Los Angeles minimum wage was not immune to a brand new, $12 per hour wage floor within city limits.
Despite the added pay increase for workers who believe that they are entitled to higher wages, many local businesses — the employers — brace for higher costs and potential loss of staff and shuttering of operations.
On July 1, the city's minimum wage increased to $12 per hour, from the $10.50, initially applying only to companies that employee 26 people and higher. Smaller businesses must comply beginning in January 2018.
Given the increase, it is projected that more than $1 billion will be added to overall payroll costs for companies affected by the wage hike, according to the Economic Roundtable, an economic research group based in the Greater Los Angeles area.
Some 566,000 people are eligible for the minimum wage hike in the L.A. area, according to an analysis by the Los Angeles Times. More than half of the eligible workers work in the hospitality and retail industries, the analysis concludes.
The L.A. minimum wage was met with opposition, naturally. Opponents cited the failure of a similar minimum wage increase in Seattle as the purpose not to allow the wage hike to take place.
The study they used, conducted by the University of Washington, concluded that jobs were scant and hours fell after the Seattle city council voted to install a $15 per hour wage hike by 2021 for low-level workers. But, the report concluded that the wage hike hurts the lowest paid employees of the city. Nevertheless, the study did reveal that the unemployment rate dropped slightly; however, in hiring labor at a high wage floor could force the price of a salad to exceed $25.
A similar study noted that the food industry increased salaries but saw no change in employment level.
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