L.A. City Council Votes To Raise Minimum Wage To $15/Hour By 2020

At $9/hour, the current minimum wage in Los Angeles is already well above the $7.25/hour federal minimum. But today the L.A. City Council voted for a plan that will increase that wage to $15/hour by 2020.

According to the L.A. Times, some 800,000 workers in the city will be affected by the increase if it is adopted.

The original plan, put forth by Mayor Eric Garcetti in 2014, would have raised pay to $13.25/hour by 2017. But labor groups pushed for the $15 hourly rate, which will be phased into for many employees over the next five years. Nonprofits and businesses with fewer employees will have an additional year to comply.

One of the biggest criticisms of minimum wage rates is that they are often raised only periodically. This hurts workers whose pay may lag behind increases in cost of living, and it is often costly to employers who suddenly have to raise wages for workers.

The L.A. plan is to, starting in 2022, tie minimum wage increases to the consumer price index. The idea is that in years of price inflation, low-wage workers won’t get left behind while employers won’t be compelled to give raises during flat or down years.

While a number of labor groups cheered the decision, many small business owners maintain that the higher wages are untenable and they will be forced to reduce their headcount.

The plan, which was approved by a vote of 14-1, will now go to the city attorney, who will draft an actual ordinance for the council to approve.

If signed into law by the mayor, the first stage of the wage increase would bring the minimum wage to $10.50/hour starting in July 2016.

Seattle was the first major city to get the $15/hour minimum wage ball rolling when its city council voted last summer to approve a plan to raise wages over the course of up to seven years. San Francisco, where the minimum wage is already over $12/hour, followed suit in November 2014. Its plan will reach the $15/hour target by July 2018. And like the L.A. proposal, future wage increases will be tied to the CPI.