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Council Approves Minimum Wage Study For Long Beach – San Diego Firm Expected To Be Used By County Group

With some councilmembers giving an early indication of support, the Long Beach City Council voted unanimously at its meeting on August 11 to move forward with a study on the potential impacts of raising the minimum wage to $15 an hour through a citywide policy.

During the coming weeks, city officials will be working with the Los Angeles Economic Development Corporation (LAEDC), which is being commissioned by the city – at a cost of $65,000 – to carry out the study, to determine the scope of work for the analysis.

In a phone interview with the Business Journal, Christine Cooper, vice president of LAEDC’s Institute of Applied Economics, which recently completed a similar study for the County of Los Angeles, said the organization would be able to produce a report for Long Beach within 60 days.

The move to study a minimum wage hike, which is largely being pushed by union labor groups, comes as a wave of public entities, states and cities across California and the country have recently raised wages.

Chicago increased its minimum wage to $13 an hour by 2019 while San Francisco plans to raise its minimum wage to $15 an hour by 2018. The states of Massachusetts and New York are both considering $15-an-hour minimum wages while the University of California recently announced it plans to raise its minimum wage to $15 an hour by 2017.

In May, the City of Los Angeles passed a law that raises its minimum wage to $15 an hour over a five-year period, reaching $13.35 an hour by July 2018 and $15 an hour by July 2020.

Last month, the Los Angeles County Board of Supervisors increased the minimum wage for unincorporated areas and county employees to $15 an hour. Like Long Beach, Pasadena, Santa Monica and West Hollywood have yet to pass minimum wage hikes but are considering the option.

At the same time, a ballot initiative is moving forward to raise the minimum wage throughout California by $1 an hour annually until it reaches $15 an hour in 2021. The minimum wage mandated by the state is currently $9 an hour and is set to increase to $10 an hour on January 1, 2016.

On a national scale, federal legislators, including Congressmember Alan Lowenthal (D-Long Beach), introduced new legislation called the Pay Workers a Living Wage Act last month that would raise the minimum wage nationwide to $15 an hour.

According to a staff report, city officials have requested that the study be an “inclusive process” that takes into account “business owners, non-profits, workers and education leaders,” adding that the report should include data and survey work about the minimum wage and possible incentives for businesses.

“If a minimum wage increase is to be considered, incentives for businesses and non-profits in the city should also be considered and discussed,” the staff report notes.

Cooper said she couldn’t comment on specifics of the survey conducted for Los Angeles County’s study, adding that LAEDC hired a third-party independent company, San Diego-based Market Enhancement Group (MEG), to conduct the survey work.

The independently conducted survey, subject to a maximum sampling error of plus or minus 3.2 percent, fielded various questions to 1,000 businesses throughout the county, including some businesses in Long Beach. The survey firm sought to collect data on employers’ workforces and receive opinions about the potential impacts of a wage increase, such as whether an employer would have to reduce an employee’s hours or layoff workers.

Survey respondents were selected on a random probability basis, according to the appendix of the study. MEG reports that it achieved a completion rate of 75 percent of all employers contacted. The surveys, conducted by phone during normal business day hours on an appointment basis, were completed during the week of April 13, 2015.

Cooper said LAEDC recommends conducting a similar survey of Long Beach businesses, adding that the study may also take into account how a rise in the minimum wage would impact Long Beach residents and residents from other cities.

Business Journal Publisher George Economides discussed the pending study with MEG’s president and research director, Barry Quarles, who indicated that he expected a survey sample of approximately 600 Long Beach business representatives. He stressed that nothing had been decided since he had yet to meet with the LAEDC.

“The proposed market research would include a stratified, random probability sample with 600 telephone interviews with Long Beach business owners, C-level executives, and similar decision-makers,” Quarles explained in a phone discussion and follow up e-mail. “A survey sample of 600 would yield results with a maximum sampling error of +/-4.1% (at two standard deviations, a 95% confidence level). Subsets of the total sample would have a higher sampling error. The initial proposal calls for three subsets of 200 interviews (yet to be defined) each based on employee size (in Long Beach). Each of the 200 interview subsets would have a maximum sampling error of +/-7.1% (at two standard deviations, a 95% confidence level).”

The L.A. County study Quarles completed for the LAEDC, was based on 1,000 phone interviews, he said, with 500 businesses located within the City of Los Angeles and 500 from the rest the county. He said 51 of those businesses are in Long Beach. He also indicated it was likely that the same 24 questions asked in the county study may be used for the Long Beach survey.

Cooper said it is wise for the Long Beach City Council to first study the potential impacts of raising the minimum wage before going forward with implementing a policy.

“As cities consider these policies, it’s always good to have as much data and informed background as you can before making or implementing a policy which I would say is wise,” Cooper said.

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