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L.A. City Council approves minimum wage increase

LOS ANGELES — The City Council Tuesday approved a $15 minimum wage for hundreds of thousands of workers in the city who currently earn $9 per hour.

The wage will increase incrementally beginning in July 2016, eventually reaching $15 an hour by 2020 for employers with 26 or more workers, with a one-year delay for smaller businesses.

The council voted 14-1 in favor of raising the minimum wage, with Councilman Mitchell Englander — the panel’s only Republican and a candidate for the county Board of Supervisors — casting the dissenting vote. The City Attorney’s Office will draft a wage-hike ordinance that will have to return to the council for a final vote.

The council’s vote was met with loud cheers and applause from the audience in a packed council chamber.

Councilman Paul Krekorian called the wage hike “a reason to celebrate,” as it would be “giving a raise to 700,000 people who are living at the bottom.”

Councilman Mike Bonin said the higher wage will address “a cancer in the city of Los Angeles called poverty.”

Los Angeles resident Vickey Vaughn-Wright told the council the $15 wage means a “brighter future” for her family and community.

“Many of my family members are affected by this,” Vaughn-Wright said.

“I feel that increasing the minimum wage to $15 an hour would give hope of a better life for many of those who are struggling.”

The wage hike comes after more than eight months of debate and three studies that were done to analyze the economic effects of a wage hike, but some council members acknowledged there will be some uncertainties.

Councilman Paul Koretz said the wage hike plan is “an experiment.”

“If anyone tells you they know exactly how this is going to go … I don’t think they’re being honest with you,” he said.

But Koretz said he was ultimately “willing to take that shot, because nobody can live well in Los Angeles … on $9 an hour.”

Councilman Curren Price, who pushed for the wage hike, said it is a “moral obligation” and a “leap of faith … led by our hearts and led by the fact that we have to do all we can to address poverty and income inequality in this city.”

Englander said he cast the lone dissenting vote because he felt a “unilateral” minimum wage hike might have “unintended consequences such as job loss, reduction in working hours or make it impossible for entire industries to do business in the city of Los Angeles.”

He said the city should focus on getting rid of the “gross receipts tax” that is paid by businesses in the city, restoring vocational and trade tech classes to high schools and educating the workforce.

Under the plan, the wage will increase beginning July 2016, when it will rise to $10.50 an hour for businesses with 25 or more employees. By then, the state wage will have risen to $10 per hour. The city minimum wage will then go up to $12 an hour by July 2017, $13.25 per hour by July 2018, $14.25 per hour by July 2019 and ultimately to $15 by July 2020.

Businesses with 25 or fewer employees will start raising their wages one year later and have until 2021 to reach the $15-an-hour mark. Smaller businesses make up about 89 percent of employers in the city, according to estimates cited by officials.

Once the wage reaches $15 per hour for both small and large employers, the proposal calls for the minimum wage in 2022 to continue increasing based on the cost of living.

Initially, the wage hike will move at a slower pace than Mayor Eric Garcetti’s original proposal to raise the minimum wage to $13.25 per hour by 2017, followed by cost-of-living increases to the wage, but it will ultimately go further sooner by increasing the wage to $15 by 2020.

Garcetti said after the council vote that with the approval of the wage hike, “help is on the way for the one million Angelenos who live in poverty.”

Garcetti, who proposed raising the minimum wage last Labor Day, said he plans to sign the ordinance that is being drafted by city attorneys.

The approval of the wage hike attracted attention on the national stage, with a senior adviser to President Barack Obama sending out a congratulatory tweet to Garcetti following the vote.

Valerie Jarrett, a longtime close adviser to Obama, wrote on her Twitter page, “Today’s vote to RaiseTheWage in LA is a huge step to help FamiliesSucceed. Congrats @ericgarcetti!”

There are some exceptions to the wage hike plan approved by the council.

Workers aged 14-17 would be paid 85 percent of the city minimum wage or the full state wage, whichever is higher, for 160 hours.

Nonprofits with more than 25 workers would also be eligible to apply for a waiver from the city minimum wage if the top executive earns less than five times as much as the lowest-paid worker, if the nonprofit provides transitional jobs, if it is a child care provider or if is mostly funded by government grants or reimbursements.

The council also voted in favor of monitoring the effects of the wage increase, particularly on certain industries such as textile and apparel manufacturing; temps, guards and janitors; home health care services; residential care and nursing facilities; restaurants and others.

The City Council will continue to study provisions that would require employers to provide paid leave benefits to workers, and require that service charges be passed on to the employee who performed the services.