Los Angeles Mayor Eric Garcetti said Wednesday that while he thought a new $15 minimum wage would be a boon for the city, it wasn't necessarily a good idea for other places to adopt that rate.
He added that it would be good for the city if the surrounding Los Angeles County, which is mulling its own increase, did not match that rate.
"Different economies need different levels. The cost of living is different, and you need to cater to what works for your city," Garcetti said during a speech at Washington's National Press Club.
Garcetti said he believed the county eventually would raise its minimum wage to something closer to the city's level. But he conceded he wasn't too worried, either. Asked if it would disrupt the area's economy if the county did not come closer to the city's level, he said no.
"It will be the opposite. If you have a poverty wage in one area, the best workers will come over" to where they can earn more money, he said. "People can live in the county and go across the line to work in the city."
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He was confident, though, that this dynamic worked in only one direction, saying studies commissioned by the city showed that local businesses would mostly absorb the higher labor costs rather than move outside the city or fire workers. The higher labor costs would be more likely to be offset by higher prices, he said.
Dustan Batton, policy analyst for the Los Angeles County Business Federation, disputed Garcetti's scenario and argued the difference was more likely to be disruptive to the metro area economy.
"Mayor Garcetti's comments highlight our concern about the challenges small businesses face in an environment where the wage rules can be different from one side of a street to the other. Rather than cultivating an ecosystem in which neighbors have to poach businesses and employees from each other, we should be working together to create good-paying middle class jobs to lift people out of poverty throughout the region," Batton said.
The county originally was set to match the city's rate, but the effort was derailed late last month when County Supervisor Hilda Solis objected, saying she could not support a $15 minimum wage unless there were exceptions for small businesses. Her move surprised many. Solis had been labor secretary under President Obama and had previously been a strong supporter of a higher minimum wage.
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A compromise could still be struck, but no progress has been reported since the effort stalled. Activists for a higher minimum wage have expressed frustration with Solis but concede that they need her backing, otherwise they cannot get majority support among the county supervisors.
It's not clear what would be the economic impact of having two different minimum wages in areas so close because there is little to compare it to. Local minimum wages that differ from the state or federal level are a fairly new idea. Minimum wages are usually raised in much smaller increments than what's called for in the current $15 proposal and they are usually raised in a broad-based manner, either statewide or nationwide.
California currently has a statewide $9 an hour minimum wage. It is set to increase to $10 next year.
Garcetti said he opposed including an exception to the minimum wage for unionized businesses, something labor organizers had requested shortly before the L.A. City Council voted on the wage. That exception wasn't included and Garcetti said he was not open to revisiting the issue.
"I don't support that. I think a minimum wage should be a minimum wage," he said, adding the controversy over the exception had been "overblown."