Chamber Opposes Mayor's Mandated Wage Proposal without a Comprehensive Economic Development Plan
Los Angeles – The Los Angeles Area Chamber of Commerce Board of Directors, during its September Board meeting, voted to oppose Mayor Garcetti’s current minimum wage proposal. The Chamber believes that any discussion of wage increases must align with the Mayor’s campaign pledge to increase jobs, grow the local economy, help current L.A. businesses to expand, and attract new businesses to the City.
“While we understand the need and agree with the desire to improve the wages and living conditions for many employees, the Los Angeles Area Chamber of Commerce wants to see a comprehensive vision for economic development in the City and any discussion of wage increases must be one part of a larger plan with concrete steps to grow our economy, increase private sector jobs, and bring new businesses to Los Angeles,” declared Gary Toebben, President and CEO. “ This standalone proposal will reduce, not increase the number of jobs in Los Angeles. Many employers, especially small businesses and nonprofit organizations, will be forced to raise prices, lay off workers, cut hours or move across the street into another city to avoid this cost increase. None of these choices are good for our economy,” Toebben stated.
Since the Mayor introduced his proposal on September 1, the Chamber has heard from member and non-member businesses from across the city. They have clearly stated that the current proposal will be detrimental to their already slow recovery since the great recession.
High unemployment and underemployment remain major issues for Los Angeles. Although comparisons have been made to Seattle and San Francisco, the City of Los Angeles has an unemployment rate over 9% while those other two jurisdictions are closer to half that rate. The UC Berkley economists have admitted that their analysis is based on numbers that look at wage impacts on a county or state-wide basis not a city with porous borders that make it much easier for companies to relocate a short distance and still service the same clientele.
The wage increases called for in the first three years of the Mayor’s proposal will result in a cost increase of more than $10,000 per employee per year when social security, workers compensation and other benefit costs are included. Younger workers and those with limited skills will be the first to be negatively impacted when fewer jobs are available because of the new minimum wage.
“From restaurants to retail and services to manufacturing, thousands of employers across the City will face the question of how to remain competitive without laying off employees or cutting hours,” stated Toebben. “We want more jobs and the higher wages that will result from a growing economy. This proposal, as a stand-alone measure, will not create more jobs or improve our economy, it will do the opposite,” Toebben concluded.
The Los Angeles Area Chamber of Commerce represents the interests of business in L.A. County. Founded in 1888, the Chamber promotes a prosperous economy and quality of life in the Los Angeles region. For more information, visit www.lachamber.com.