Two Los Angeles city councilmen urged Council President Herb Wesson and top city officials to reopen the process for choosing an economist to study the impacts of a proposed $15.25 minimum wage in Los Angeles.
The winning bidder for the job, University of California Berkeley economists, “are the same economists that produced the original report for which (Mayor Eric Garcetti) is basing his minimum wage proposal,” giving at least the appearance of a bias, City Council members Mitch O’Farrell and Felipe Fuentes said in the letter.
Berkeley did a previous study that indicated Garcetti’s proposal to raise the minimum wage to $13.25 per hour by 2017 would be beneficial. The City Council is now debating a proposal that would increase the wage even further to $15.25 per hour by 2019.
O’Farrell and Fuentes said in their letter that they “would like to reopen and extend the request for proposal deadline, so that we can engage in a process that is worthy of our employers, workers and their families, and the well-being or our economy.”
The council members also complained that the pace of the bidding, done over the holiday season, so far “does not speak to a process that gives the city much flexibility in identifying interested and qualified bidders.”
Council members had not planned on doing a new study of the wage hike proposals until O’Farrell, Councilman Bob Blumenfield and a few others pressed colleagues to do one, citing concerns of the plan’s impact on small businesses in particular.
O’Farrell expressed surprise that UC Berkeley was even considered, saying he wanted independent economists to vet the mayor’s $13.25 plan, which would be impossible if the same economists who studied that proposal were hired again.
“Everyone feels that it’s predetermined, and doesn’t have the integrity that it needs,” O’Farrell said of the process so far.
Fuentes, who also signed onto the motion to study the wage hike plans, said today that “it’s really important that we get this policy right, which is why we issued letter to President Wesson.”
He added that he thinks there are “plenty of economists that can do the peer review” of UC Berkeley’s previous findings, including academic institutions based in Los Angeles.
Their letter was addressed to Wesson, Chief Legislative Analyst Sharon Tso and City Administrative Officer Miguel Santana, but the question of whether to continue searching for other firms would ultimately be up to the City Council.
The option of re-opening the bidding would need to be raised at an upcoming Economic Development Committee meeting, which includes neither Fuentes nor O’Farrell, but has seven of their colleagues.
The UC Berkeley Institute for Research on Labor and Employment was one of four teams that responded to a request for proposals by city officials to perform the study.
He added that he thinks there are “plenty of economists that can do the peer review” of UC Berkeley’s findings on the $13.25 proposal and the additional increase to $15.25.
UC Berkeley offered to do the study for just under $85,000, with the maximum cost for the study capped at $100,000, according to Tso.
The study would require a quick turnaround, as it is due by early February.
The other firms that applied were the Economic Roundtable, a nonprofit that gave a favorable assessment to a wage hike to $15.37 per hour for many hotel workers set to start in July, and Beacon Economics, which blasted the hotel wage hike, with researchers saying it would result in lost jobs. The
consulting firm Applied Development Economics also was passed over for this latest study.
A San Fernando Valley-based business group also expressed dissatisfaction today at the city’s selection of the UC Berkeley economists.
Stuart Waldman, president of the Valley Industry & Commerce Association, said they are “incredulous” that the city chose the same consultant that worked with the mayor on his proposal.
UC Berkeley “should have been disqualified from the get-go” and “is unlikely to change its position on the issue now,” Waldman said. “In order to eliminate bias, the city needs to pick another, independent researcher to really examine the effect such an increase would have on jobs.”
— City News Service