Photo by John Schreiber.
Photo by John Schreiber.

A Los AngelesCity Council committee on Tuesday backed the creation of a bureau that would enforce a proposed higher minimum wage in the city to ensure workers are being paid properly.

The City Council’s Economic Development Committee supported the wage enforcement measure as part of its discussions around raising the minimum wage to $13.25 per hour by 2017, or to $15.25 per hour by 2019. The bureau would only be created if the city actually increases the minimum wage.

Similar “bureaus” have been set up in San Francisco and Seattle to enforce ordinances that raised their city minimum wages above the state and federal levels.

City officials are considering staffing Los Angeles’ bureau with at least five people.

The wage enforcement proposal will be taken up next by the Budget and Finance Committee, which will take a closer look at how the city can fund the bureau.

With four economic studies completed, the minimum wage hike proposals themselves will also be taken up soon, with staffers expected to report back to the Economic Development Committee on detailed proposals as early as next week, council aides said.

Some council members are considering possible tweaks to the wage hikes, with some in the business community urging exceptions for tipped workers who sometimes earn salaries above the minimum wage after tips are accounted. Other proposed exceptions include giving small businesses or nonprofits more time to adjust to a higher minimum wage.

The Economic Development Committee also heard presentations on a peer assessment by UCLA and University of Georgia economists on three studies conducted by the city, labor and business groups.

The reviewers found that despite numerous studies on the issue, uncertainties remain about the effect of raising the minimum wage in Los Angeles, and any wage hike adopted should be monitored closely.

The peer reviewers found that a study by the UC Berkeley Institute for Research on Labor and Employment commissioned by the city was the most “thorough” of the studies. Nonetheless, Berkeley’s report does not resolve some uncertainties about how the hike would affect the local economy, according to economists Till von Wachter of UCLA and Jeffrey Wenger of the University of Georgia.

One of the uncertainties is due to the size of the proposed wage hike, which the reviewers said is “large both in terms of the proportion of the labor force impacted, and in terms of the size of the increase.”

Other uncertainties stem from the “complex geography of adjacent municipalities and counties” and the “potential long-term effects,” the economists said.

The reviewers said the Berkeley study does a better job of predicting the impacts of a $13.25 per hour wage but is less convincing on the $15.25 per hour wage, the reviewers said.

“If the debate were over raising the minimum wage to $13.25 per hour by 2017, we would argue that the Berkeley-IRLE estimated impacts are the most likely scenario, partly because this size of increase is represented in previous estimates of the effect of minimum wages on employment,” the reviewers said. “Confidence in predictions of the effect of the larger increase to $15.25 per hour by 2019 is necessarily lower, given the longer time period and the larger increase in the minimum wage relative to most previous experience.”

The peer review also suggests that whether the city chooses to adopt a $13.25 per hour wage or a $15.25 hour wage, city leaders should “follow the example of other city minimum wage ordinances and monitor the economic situation in the city.”

“An effective system of monitoring requires timely data collection of firms and workers who are most affected by the law, and measures of the effects on worker income and firm profits,” the peer economists said.

Programs to help workers and employers affected by the wage hike should also be made available “should the benefits of the proposed increase in the minimum wage be lower or the adverse effects larger than anticipated,” they said.

—City News Service

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