retail news in context, analysis with attitude

The New York Times reports that the Los Angeles City Council yesterday voted 14-1 to increase its minimum wage from $9 to $15 per hour by 2020, "in what is perhaps the most significant victory so far for labor groups and their allies who are engaged in a national push to raise the minimum wage."

The Times goes on: "Several other cities, including San Francisco, Chicago, Seattle and Oakland, Calif., have already approved increases, and dozens more are considering doing the same. In 2014, a number of Republican-leaning states like Alaska and South Dakota also raised their state-level minimum wages by ballot initiative.

"The effect is likely to be particularly strong in Los Angeles, where, according to some estimates, almost 50 percent of the city’s work force earns less than $15 an hour. Under the plan approved Tuesday, the minimum wage will rise over five years."

Here's how the raise will phase in: "The 67 percent increase from the current state minimum will be phased in over five years, first to $10.50 in July 2016, then to $12 in 2017, $13.25 in 2018 and $14.25 in 2019. Businesses with fewer than 25 employees will have an extra year to carry out the plan. Starting in 2022, annual increases will be based on the Consumer Price Index average of the last 20 years."
KC's View:
That sound you hear is that of the governors of Texas and Wisconsin, among others, beating a fast path to Los Angeles to pitch businesses there on relocating to their states. That's just a political reality ... some businesses will make such moves, and others will prefer to figure out how to stay in LA ... it is, after all, a place where, from the South Bay to the Valley, from the West Side to the East Side, everybody's very happy, 'cause the sun is shining all the time ... Looks like another perfect day. Can't get that in most other places. (And I should note here, in the interest of transparency, that I Love LA.)

It may not be as easy as offering alternatives. The vote is expected to create pressure on other California counties and municipalities, not to mention other states and cities, to raise their minimum wages. However, there are those in the business community who believe that it will isolate Los Angeles, turing the nation's second-largest city into a kind of pariah, with businesses looking to surrounding communities for locations that will provide relief from a high minimum wage.

We'll see. I like to think - or maybe hope - that when people make a living wage, that gives them more money to spend, makes them less reliant on public support systems, propels them to be more productive, and gives them a sense of contributing to society and supporting their families. Will there be short-term blips, in which employment numbers go down? Sure. But if business is good, hopefully it'll be good for everyone.

Besides, in LA you can roll down the window, put down the top, crank up the Beach Boys, baby ... don't let the music stop. We're gonna ride it till we just can't ride it no more...