Los Angeles Raises Minimum Wage to $15 an Hour

[onehandle]

Source: New York Times

LOS ANGELES — The nation’s second-largest city voted on Tuesday to increase its minimum wage to $15 an hour by 2020, in what is perhaps the most significant victory so far in the national push to raise the minimum wage.

The increase — which the Los Angeles City Council passed in a 14-1 vote — comes as workers across the country are rallying for higher wages, and several large companies, including Facebook and Walmart, have moved to raise their lowest wages. Several other cities, including San Francisco, Seattle and Oakland, Calif., have already approved increases, and dozens more are considering doing the same. In 2014, a number of Republican-leaning states like Alaska and South Dakota also raised their state-level minimum wage by referendum.

The impact is likely to be particularly strong in Los Angeles, where, according to some estimates, more than 40 percent of the city’s work force earns less than $15 an hour.

“The effects here will be the biggest by far,” said Michael Reich, an economist at the University of California, Berkeley, who was commissioned by city leaders here to conduct several studies on the potential effects of a minimum-wage increase. “The proposal will bring wages up in a way we haven’t seen since the 1960s. There’s a sense spreading that this is the new norm, especially in areas that have high costs of housing.”

Read more: http://www.nytimes.com/2015/05/20/us/los-angeles-expected-to-raise-minimum-wage-to-15-an-hour.html

[Politicalboi]

1. In 5 years

Hold your breath everyone, your living wage will be here someday.

[LoisB]

10. Phased in starting next year, increased each year until it reaches $15 in 2020.

[Iliyah]

2. K & R

[Dawgs]

3. This is a big deal, folks.

[marble falls]

4. Like number one said, "in five years." Not quite as big a deal as it shoulda been.

[taught_me_patience]

6. When do you think it should be phased in?

This is a 66% increase in 5 years. This will have a huge negative impact on food service businesses and will probably force many to go out of business.

[Codeine]

7. Or they may experience

an increase in business as people find they have a greater amount of disposable income and enjoying eating out more frequently.

Time will tell, but I remember the apocalyptic peals of doom the smoking ban engendered, and every bar, diner, and club in town is still packed to the gills. I believe we'll weather this as well.

[sir pball]

16. At a 20-30% increase in menu price. Edit to add, I'm all for the raise.

Last edited Wed May 27, 2015, 10:06 AM - Edit history (1)

Not an an exhaustively micromanaged, low-cost chain like McDonalds, or necessarily even Olive Garden-type places, but independent restaurants absolutely will have to significantly increase prices. I'm not offering an opinion on the increase (edit: Let's clear this up, I ABSOLUTELY, UNCONDITIONALLY, 100% SUPPORT THIS LAW), but seeing how I've been in the industry for 20 years I can speak with some authority to what it's going to do to operating costs. And before you say "maybe the owners shouldn't be so greedy, they should just take a cut in profits", most places the final net is about 3% of the total sales at best. I'll look up a citation for that later if you wish.

Labor accounts, or at least should in a well-managed place, for ~1/3% of the cost of a dish: a $10 plate has $3.33 of work going into it, by everybody from the dishwasher to the busboy to the head chef. That's pretty much going to be an across-the-board 66% increase - yeah, it's only a raise in the minimum, but you're going to have to bump everybody's pay up to compensate...the line cooks and sous chefs are going to have to make proportionately more than the dishwashers lest they all quit to just go wash dishes. So now its $5.55 of labor.

The cost of the actual food is another 30-33% of that $10 dish; the price of that is going to jump as well, since at least some of the people involved in getting it to the restaurant will be paid 66% more and I guarantee the purveyor won't, or can't, eat that loss. It's a local ordinance so we'll say food goes up 25%, if it were a national law I'd guess on damn near that doubling as well. So that cost goes from $3.33 to $4.16.

Even allowing those as the only increases, which may or may not be (rent could go up due to higher administrative costs at the management co., equipment maintenance and service costs, garbage disposal for sure), that $10 plate is now 13.05. It scales pretty much linearly, so that nice $30 steak you splurge on for your birthday will jump to a cool $42. More directly, my line cooks here in NYC make $15 as opposed to the $9 they got in Maine, it's the predominant reason I could charge $18 for a pork chop up there but have to stick $28 for the same thing down here. I don't necessarily think it's unfeasible and I'm intensely curious to see how it works out, but the independent restaurant industry will definitely take a hit.

[Hassin Bin Sober]

18. Basically, all the worst parts of The Bible if we raise the minimum wage.

[sir pball]

19. Did you miss where I said I back a raise?

indeed..

[DiverDave]

21. Uh-Huh, I guess the Austrailians have no restaurants.

Because, you know, they have a high wage.

take that strawman and burn it

[sir pball]

22. OMG! Literally everything I've learned in 20 years is clearly wrong! Thanks for clearing that up!

McDonald's is an entirely different beast from an independent restaurant; they have total control over their supply chains, incredibly tight operational logistics, and volume beyond belief; their labor costs are infinitesimal compared to the "real world". There's a reason their profit margins are 6-10% instead of 1.5-2%.

And frankly, I know what the balance sheets at every place I've worked look like, and what higher wages are going to do to them. You can take your cutesy low-information infographic and stuff it - a well deserved, entirely appropriate 66% increase in wages in an American city is going to make your local pasta joint raise prices a good bit. But hey, if you're bringing home twice the money, paying a quarter more for that spaghetti bolognese shouldn't sting too much.

While I have you, since I am clearly wrong about this, can you explain why the pate en croute at Benoit NYC is $19 while it's €27 for the exact same dish, at the exact same restaurant, in Paris? It's a quick example I've picked off the top of my head, I can come up with plenty more if you can show me the error my my ways

http://benoitny.com/menus
http://www.benoit-paris.com/sites/default/files/menus/2015-03-26_benoit_paris_-_gbcarte_food_0.pdf

[Psephos]

23. Seriously, sir pball, can you please just lay off the facts and insider experience?

It is irksome to those of us who prefer our opinions be unchallenged by information.

[sir pball]

24. Aw hell, I'd be happy with just having my posts read!

Pretty obvious that reply was a blind point-n-shoot, since I pretty clearly (at least, I think it was clear...I didn't use big words) said

1. Gigachains have things so down-pat that labor costs are almost marginal, and more to the point,

2. I WHOLEHEARTEDLY SUPPORT A $15 MINIMUM WAGE.

Think I'll go edit my original to clarify that, since people here don't seem to be able to understand the concept of agreeing with something, but also being aware of possibly negative consequences of the thing in question.

Cheers!

[DiverDave]

25. Oh, then why dont you advise the governments that

mandate a living wage?
Clearly, you are a legend, and have so much to offer. All your experience and what-not
Sure plastic mac's can buy in bulk, keeping costs down.
But what about the thousands and, well, a bunch more that seem to
do fine paying a living wage?
So, you claim that 15 bucks will kill restaurants...the overwhelming evidence is
that you are wrong.
And pretty passionate about it.

[sir pball]

26. Are you calling me a lying RW shill or just incompetent at my job?

Can't tell which you're implying, but either one is untrue, and fucking insulting no less.

You clearly have no idea how the restaurant industry works, and no interest in learning. I just laid out the cold reality of what a wage hike must do to restaurant prices and literally all you've done is bleat about McDonald's in Australia being price-equivalent to America, even though Norway and Switzerland, both with comparable wages, are laughably expensive, and refused to learn about their complete incomparability to any kind of normal restaurant operations, while outright ignoring the difference in price between the exact same dish (they take great pride in the recipe) in NYC and Paris. That isn't discussion, it's you sticking your fingers in your ears and screaming "BIC MAC LALALALALALA".

Not to mention putting words in my mouth, which I realize is a hallowed DU tradition but galls me to no end in this case because not only am I factually right, it's also, well, not what I said. "Raise wages by 2/3 and prices at restaurants will go up, here's my estimate" is all I said. Nothing about killing the industry. It does quite well in countries with living wages - how do they do it? They charge a third more but pay twice as much...you still come out ahead! Pretty simple, really.

Let me re-re-iterate: I QUITE LIKE THE IDEA OF A $15, OR MORE, MINIMUM WAGE AND THINK IT SHOULD BE NATIONAL. Clear enough?

[Lagom]

14. Top Three Myths Conservatives Use To Oppose Increasing The Minimum Wage

http://thinkprogress.org/economy/2012/07/26/590571/top-three-myths-conservatives-use-to-oppose-increasing-the-minimum-wage/

1) The minimum wage kills jobs. “It’s a classic election-year ploy to make the Democrats look like they’re protecting low-income workers. I think it’s well understood that raising the minimum wage hurts workers on the lower end of the pay scale in that it does kill jobs,” said a recent statement from the U.S. Chamber of Commerce. However, several academic studies have shown that raising the minimum wage does not have a negative effect on employment. In fact, an analysis of state minimum wage increases showed that those state boosting their wage “had job growth slightly above the national average.”


2) Increasing the minimum wage hurts small businesses. Gov. Chris Christie (R-NJ) reacted to a proposal to raise the minimum wage by saying that small business owners are “going to have to lay people off.” However, two-thirds of low-wage workers actually work for big corporations, most of which have largely recovered from the recession and could therefore afford to increase wages. The three largest employers of low-wage workers have all seen large profit increases in the last few years.

[Cal Carpenter]

15. I'd appreciate any evidence of this:

"This will have a huge negative impact on food service businesses and will probably force many to go out of business."

Because every study I've read indicates that it isn't the case.

[sir pball]

17. See my post above.

It absolutely is going to result in a significant spike on menu prices at non-chain restaurants; whether or not that's going to be a "huge negative effect" is yet to be seen. It works pretty well in Europe, at any rate..

[IcyPeas]

5. vote was 14-1. guess who voted "No" - the only (R) in the LA City Council.

Mitchell Englander (born July 25, 1970) is a member of the Los Angeles City Council, representing District 12 in the San Fernando Valley. Currently the district covers the Northwest Valley communities of Chatsworth, Granada Hills, Northridge, Porter Ranch, Sherwood Forest, West Hills, and parts of Reseda and North Hills.[1] Beginning on July 1, 2012, with new boundaries from redistricting, Englander represents the West, Northwest, north-central, and North San Fernando Valley.[2] He is the only member of the city council who is registered as Republican.[3] He calls himself a fiscal conservative. He came into office July 1, 2011.

http://en.wikipedia.org/wiki/Mitchell_Englander

[seveneyes]

8. There's a signpost up ahead

[Sgt Preston]

9. I'm for it, even though it will be inflationary.

Because our economic system has been so thoroughly oligopolized, business owners have pricing power, and will pass this on to consumers. The effect will be like an additional tax, but I'm happy to pay it. As usual, the working class will have to bear the brunt of income redistribution. But if that's the only way to improve the standard of living of those worst off, I'm for it.

[bobjacksonk2832]

11. Great news

Hopefully this will spread throughout the country. We desperately need higher wages to live comfortably.

[inanna]

12. K & R

[DFW]

13. Stupid California Libbruls

What are they trying to do anyway? Make their city a better place to live, or something? Some kinda nerve, they got.......