When Los Angeles and Sacramento voted to increase the minimum wage for low income employees, it didn’t just affect those workers living within the Los Angeles city limits. The vote could have far-reaching affects on neighboring communities. The push for minimum wage increases might also impact how Inland Empire residents live, work, and commute.
The Impact of Wage Increases
Los Angeles and Sacramento recently voted to increase minimum wages for low-income employees to $15 an hour. The movement has garnered much support from families struggling to make ends meet on the current $9 an hour standard. Meanwhile, those opponents of the increase fear it will decrease jobs as employers struggle to pay legal wages.
One perhaps unforeseen result is how the minimum wage increase will affect the highways. According to economists in the area, L.A.’s recent vote to increase the minimum wage to $15 by 2020 will affect Inland Empire highways. As more lower-wage workers head to the coast as a result of commuting becoming more affordable, businesses are looking for ways to escape the inevitable higher costs of production. While the California Senate’s passage of the bill that would create the highest wage floor of any state helps low-income employees make rent, it might also cut the number of jobs that employers can offer.
While the California Senate has passed the wage hike, its passage in the Assembly is uncertain.
If the legislation is approved by the Assembly, the current wage of $9 an hour would raise to $11 next year, $13 in July of 2017. Starting in 2019, the wage would automatically increase according to the inflation rate.
Movements Across the Nation
Despite the fact that a similar bill failed to reach the Assembly floor last year, movements across the nation have surged. Over the past year, thousands of low-wage employees nationwide have taken to the streets in protest of economic inequality.
Businesses from Google to Wal-Mart and McDonald’s, have announced across-the-board increases for entry-level employees.
Starting July 1, employees at company-owned McDonald’s across the nation will receive at least $1 an hour more than the minimum wage set by local law. The raise does not apply to employees of the franchise-owned stores. Franchise-owned stores make up 90% of the McDonald’s restaurants in the U.S. Franchise owners set their own wage rates. But those employees of the company-owned stores, who have at least one year of experience, will also be able to accrue paid time off. .
Raises Across the Nation
Meanwhile, across the nation, politically conservative states, including Alaska, Arkansas, Nebraska and South Dakota, have also passed ballot measures that will raise their minimum wages. Los Angeles and San Francisco are the most recent cities to increase their wage floors.
According to the U.S. Bureau of Labor Statistics, 3.6 million California laborers earn less than $12 an hour. And 5.1 million make below $15 an hour. But not for long if they live in Los Angeles or San Francisco.
In Los Angeles, the minimum wage will reach $15 within a number of five years. In San Francisco, on May 1, the minimum wage increased from $11.05 from $12.25 and is set to reach $15 on July 1, 2018.
According to a report by UC Berkeley’s Institute for Research on Labor and Employment, boosting the minimum wage to $13 would save California more than $2 billion between 2016 and 2018, due to the fact that fewer workers would need state-paid health care. Those workers would also pay more in income and sales taxes.
Assembly Room Fight
While the wage increase passed the Senate on June 1, with vote of 23 to 15, it’s likely to run into heaving opposition when it goes before the Assembly. It has been widely opposed by Republicans. While the Assembly has 52 Democrats and 28 Republicans, the legislation must pass through two Assembly committees before reaching the floor this summer.
“A moderate Democratic caucus has emerged in the Assembly because of California’s open primary system,” said Bryan Starr, senior vice president of government affairs for the Orange County Business Council. “They are defenders of small business.”
Steve Smith, spokesman for the California Labor Federation, believes given such staunch Republican opposition to any increase in the minimum wage, “It’s going to come down to the caucus of moderate Democrats. With the Chamber of Commerce labeling it a ‘job-killer,’ (the bill) is going to be challenging to pass.”
Those in support of the wage increase argue the measure will save taxpayers money, as a result of the fact that workers earning low wages will now be less reliant on publicly funded health care, food stamps, and other state-welfare programs.
“It is time that we make it illegal to pay subpoverty wages in California,” said bill author, Sen. Mark Leno, D-San Francisco, during the debate.
But those in opposition argue that wage increases will hurt wage-earners. According to Assemblywoman Melissa Melendez, R-Lake Elsinore, “Typical of liberal California legislators, they’ve once again chosen to spend more of other people’s money, if this bill passes, those who lose their much-needed jobs, since their employer can no longer afford them, will have these lawmakers to blame, and rightly so.”
The Cost of Living
While Los Angeles and San Francisco employees may be receiving a wage increase, what about those counties in surrounding areas? A recent study by the National Low Income Housing Coalition and the Kennedy Commission, found that a worker in the Inland Empire needs to earn $22.17 an hour to be able to afford a typical two-bedroom apartment in either Riverside or San Bernardino counties.
Rose Mayes, executive director of the Riverside County Fair Housing Council, said employees of the agency are already are making a minimum of $15 an hour. Clients working at wages below that often visit their office because they are short $50 to $100 on rent.
“They’re not making enough money to meet the rent or mortgage,” according to Mayes. “That tells me there is a need to increase wages across the board.”
Two economists taking a closer look at Riverside and San Bernardino counties predict the higher wages being offered in neighboring Los Angeles could make for a interesting economic exchange with the Inland area.
As business owners in Los Angeles look for ways to beat the city’s higher wage demands, it only makes sense they would look to neighboring counties.
“In the case of San Bernardino, where you have not only a relatively low cost of doing business, you would have low employment costs, as well,” said Christopher Thornberg, an economist and founder of Beacon Economics. “It’s a great development opportunity for everybody but L.A.” Jordan Levine of Beacon Economics believes that Inland Empire workers who were once unable to commute to L.A. may find it more feasible with a higher minimum wage.
According to Levine, more than 25 percent of Inland residents commute out of the region every day to work at jobs in the Los Angeles region and Orange County. “Until now, much of the commuting workforce had jobs in a higher wage bracket,” Levine said.
“Now, with wages spread to the lower down-wage and skill spectrum,” it now makes more sense for a worker to commute to Los Angeles. “Until now, $9 an hour didn’t pencil out,” Levine said.
But will the minimum wage increase hit the Inland Empire?
According to Sandy Harmsen, executive director of the San Bernardino County Workforce Investment Board, Los Angeles officials voted to increase the minimum wage because of concerns regarding the city’s high cost of living.
“We’re not anticipating it will happen in our region,” she said. “We are two distinctly different regions.”
Working with an Employment Attorney
There are a number of issues that can arise when you are an employee. From discrimination to wrongful termination, an employment lawyer such as those at Resnik Hayes Moradi LLP, handle many types of employment law claims. If you feel you have been wrongfully terminated and because of discrimination you are able to take legal action against your employer. Discriminatory actions can be based upon a person’s gender, sexual orientation, race, disability, medical condition (including pregnancy), age, national origin or religion. Lawyers at Resnik Hayes Moradi LLP will investigate your claim and effectively represent your rights and interests. We also work in matters of wage and hour litigation. Employees are legally able to pursue claims for unpaid overtime, unpaid meal and rest breaks, minimum wage pay and other claims related to wages and hours worked. Our law firm is familiar with the specific rules of the Fair Labor Standards Act (FLSA) along with federal and state wage and hour laws. If you feel you have a need for an employment lawyer, we strongly advise you set up a consultation with us as soon as possible so we can discuss the options available to you.