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Paul Zimmerman
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Southern California Cities Following LA’s Lead by Increasing Minimum Wages

Article originally appeared in HALA Newsletter

Championed by union organizers, last year the Los Angeles City Council’s Economic Development Committee gave final approval to increase the minimum wage to $15.37 per hour for hotels with 300 or more rooms by July 1st, 2015, and for hotels with 125 or more rooms by July 1st, 2016.

California’s minimum wage is $9 per hour, increasing to $10 on January 1, 2016. Earlier this year, the Los Angeles City Council passed an ordinance that will raise the minimum wage from $9 per hour to $10.50 an hour beginning in 2016. The rate will then jump to $12 in 2017; $13.25 in 2018; $14.25 in 2019; and $15 by 2020, taking place on the first of July each year.

The following is a list of cities that are currently considering their own wage increases:

Long Beach

The current minimum wage in Long Beach is $9 per hour, and Long Beach is considering a $15 minimum wage by 2020. Employees at hotels with 100 or more rooms are entitled to $13 an hour. The Long Beach City Council recently approved a study to be conducted by the Los Angeles County Economic Development Corporation (LAEDC), which should be completed and returned to the city early next month.  Business owners are warning that the increase will result in layoffs, or establishments leaving the city altogether. Reacting to the prospective wage hikes, some service businesses in Long Beach and other cities have stated they will be adding a 15 % service charge to each guest’s bill to compensate for the drastic increase in payroll cost. Hotel and restaurant workers who rely on tips have cited other cities where these kinds of added costs have reduced gratuities.

Malibu

On August 10, 2015, the Malibu City Council authorized the city’s staff to research and prepare an ordinance that would establish a new minimum wage in Malibu. The Chamber of Commerce has distributed a survey to business owners regarding whether they feel an impending wage hike is in Malibu’s best interest. The City is considering raising the minimum wage from $9 to $15 per hour.

Pasadena

Pasadena has formed a citizen’s panel, comprised of workers, residents, and business owners that are researching and providing findings before the city’s Economic Development and Technology Committee. The City is closely monitoring to Los Angeles’s increases, and considering raising its minimum wage from $9 to $15 per hour.

Santa Monica

A recent Santa Monica City Council meeting was attended by council members, staff and over 60 members of the public. With a current minimum wage of $9 per hour, Santa Monica is looking to adopt a similar model and timeline as the City of Los Angeles, but has tabled making any firm decisions until this December. 

West Hollywood

Mayor Lindsey P. Horvath has said that she’d like to see West Hollywood have a higher minimum wage than $15 per hour.  In May, West Hollywood's city council approved increasing the city's living wage to $12.10 for workers with health benefits and to $13.42 for those without benefits—this became effective July 1, 2015.

A Cohesive Wage

Southern California should be taking cues from the northern part of the state, where the mishmash of minimum wages has led to considerable confusion. Currently, San Francisco’s minimum hourly wage is $12.25 per hour (increasing to $15 in 2018), while Oakland, also with a $12.25 wage, is set to increase at the rate of inflation. Berkeley is $11 per hour, with an increase to $12.53 by October 2016. Sacramento’s City Council just passed an ordinance to raise the minimum wage gradually—to $10.50 by 2017; $11 by 2018; $11.75 by 2019; and $12.50 by 2020. Politicians in Northern California have begun considering a regional minimum wage, and hopefully Southern California will also develop a unified wage policy. 

Impact on the Hotel Living Wage

In a more gradual fashion, Southern California cities are catching up with Los Angeles’ $15.37 hotel living wage. While outsourcing and using third parties as vendors may still be an effective cost-saving measure, it is not going to be as significant as hoteliers may have originally thought.  Of course, the variance in minimum wages across geographical areas makes it imperative for hoteliers with multiple properties to be tracking the wage requirements across the state.