Los Angeles gives preliminary approval to US$15 minimum wage

[LOS ANGELES] The Los Angeles City Council voted on Tuesday to increase the minimum wage in the nation's second-largest city to US$15 an hour by 2020 from the current US$9, in a victory for labour and community groups that have pushed for similar pay hikes in several US municipalities.

The council's 14-1 vote on the measure, which must come back before the panel for final approval, would require businesses with more than 25 employees to meet the US$15 pay level by 2020, while smaller businesses would have an extra year to comply.

Officials said the plan, which comes on the heels of similar minimum wage hikes in other major cities including Seattle and San Francisco, would increase pay of an estimated 800,000 workers in the city. "We are embarking upon, I think, the most progressive minimum wage policy anywhere in the country," City Councilman Curren Price Jr., one of the main backers of the proposal, said before the vote.

With the federal minimum wage stagnant at US$7.25 an hour since 2009, labor and religious groups have increasingly pressed local governments in liberal-leaning areas to enact their own minimum wage hikes even as their hopes dim for an increase from the Republican-controlled US Congress.

The proposal given preliminary approval in Los Angeles, where housing costs are among the highest in the nation, represents a far-reaching victory for supporters of higher pay for low-wage workers.

The 67-per cent pay increase would be implemented gradually, starting at US$10.50 an hour for larger employers in 2016, and gradually going up each year until it reaches $15 in 2020.

Companies with 25 or fewer workers would follow a similar stepped-up increase in minimum wage pay, but would first raise wages in 2017. They would have until 2021 to reach US$15 an hour.

Opponents of minimum wage hikes, such as Los Angeles Area Chamber of Commerce senior vice president of public policy Ruben Gonzalez, say they place an undue burden on businesses, and would force employers to lay off workers or move. "There is simply not enough room, enough margin in these businesses to absorb a 50-plus per cent increase in labour costs over a short period of time," he told the city council.

Other cities have also moved to increase their minimum wages in phases.

Seattle is phasing in a pay hike that would bring the minimum wage to US$15 an hour over the next two to six years, depending on the size of the business. Voters in San Francisco have approved raising their minimum wage to US$15 an hour by 2018.

The San Francisco Bay Area city of Emeryville has given preliminary approval to gradually increase its minimum wage to US$16 an hour by 2019, in what would be the nation's highest such minimum pay. The city council is scheduled to vote on Tuesday evening on whether to give that final approval.

Chicago city leaders last year approved raising its minimum wage to US$13 by 2019, and New York Mayor Bill de Blasio has called for raising the minimum wage in his city to about US$15 by 2019.

REUTERS