Mayor Robert Garcia has granted a request to give the city’s economic development commission (EDC) more time to review studies on the potential impacts of raising the minimum wage in Long Beach, extending the deadline for the commission to make a final recommendation to the city council to early next year.
The 11-member commission agreed at its meeting on October 27 to request more time to review the subject after commissioners raised concerns that one meeting on November 24 wouldn’t be sufficient to consider such a complex and important topic before making a recommendation to the city council.
In response to the commission’s request, the mayor stated in a letter that the commission should meet in December and January to further review the issue with additional public input, giving the commission until early next year to make a recommendation, said EDC Chair Frank Colonna, a former two-term city councilmember and local real estate agent, in a phone interview with the Business Journal.
Although no firm dates have been set yet, the city council will conduct a formal public hearing after the commission makes its recommendation, he said, adding that the city council may ultimately take even more time to make its own decision on the subject.
“We’re going to be meeting in December and January as well as this month in order to make sure that we get our due diligence in and get as much information as we can from all the different moving parts to make a recommendation that’s right for Long Beach,” Colonna said. “Our recommendation is the one that’s going to be given to the city council where we should go, if we go anywhere, with an increase.”
He said the issue of whether Long Beach should establish a minimum wage following the City of Los Angeles and other major cities doing so is “one of the largest and most significant decisions” the city will make for years to come, impacting “many, many people, the businesses they work in and the economic health of the community.”
Colonna added that Long Beach is “unique” and far different than Los Angeles, with lfewer major manufacturing plants, more service-oriented small businesses and a different cost-of-living structure.
In August, the city council agreed to contract with the Los Angeles County Economic Development Corporation (LAEDC) to conduct a study on the feasibility and potential impacts of raising the minimum wage in Long Beach through a citywide ordinance, also providing possible incentives or exemptions that may assist employers in complying.
The LAEDC, which is conducting a random sample survey of 600 businesses in Long Beach, is expected to release the results of its study, expected to be purely informational, some time this month.
City officials have agreed to study the issue on the heels of the City of Los Angeles having raised its minimum wage to $15 an hour, incrementally, over a four-year period starting next year. The County of Los Angeles, which commissioned the LAEDC to do a similar study, has raised its minimum wage to $15 an hour by 2020 for unincorporated areas.
A campaign called “Raise the Wage,” backed by the union-sponsored Los Angeles County Federation of Labor, is, meanwhile, pushing for the minimum wage in Long Beach to be raised to $15 an hour. A majority of city councilmembers expressed support of the campaign’s proposal prior to the city council’s approval of moving forward with the study, including some councilmembers joining a labor union rally outside city hall. That resulted in protests from business people who said councilmembers have already made up their mind to support an increase.
As a way to field input from a wide variety of stakeholders, including employees, business owners and nonprofits, the City of Long Beach scheduled six meetings on the subject, three of which have already been conducted.
Now that extra time has been granted, it will give the commission an opportunity to review an additional report from the Council of Business Associations (COBA), which is conducting a series of surveys and focus groups to collect feedback from businesses about the issue.
During the EDC meeting on October 27, Blair Cohn, executive director of the Bixby Knolls Business Improvement District (BKBIA) and president of COBA, stated that the community review process is essentially a “ruse” since it appears that a majority of city councilmembers have already made up their minds in supporting raising the minimum wage.
In a phone interview with the Business Journal, however, Cohn clarified that his comment was part of a longer discussion that, if the commission isn’t given enough time to read data from studies and other information, then a recommendation would be futile.
“That was to get a reaction out of everybody,” he said. “If we put no thought into it, then it makes no sense.”
At a meeting on October 29 at Long Beach City College, more than a dozen people provided public testimony to the city council’s economic development and finance committee, served by Councilmembers Stacy Mungo, Suzie Price and Roberto Uranga.
During the meeting, business owners and community members expressed concerns about various “unintended consequences” of raising the minimum wage.
In previous meetings and in interviews with the Business Journal, several restaurateurs and small business owners have expressed strong concerns that a minimum wage hike would force them to raise prices, putting them at a competitive disadvantage with similar businesses in other cities.
Small business owners have also stated that raising the minimum wage would force them to hire fewer employees, cut benefits or possibly lay off workers.
Small business owners, who have already had to deal with rising labor costs from recent increases in workers’ compensation insurance, health benefits and the state’s minimum wage increase that jumps to $10 an hour in January, have stated that they would either have to move to another city or close their doors altogether.
Advocates of raising the minimum wage in Long Beach, on the other hand, have stated that imposing such a policy on employers would provide minimum wage earners with more disposable income that would benefit the local economy.
Still, business owners argue that such a hike in the minimum wage would only drive up prices, canceling out any benefit that employees would see from higher wages.
At the meeting on October 29, several minimum-wage earners, including those working for fast food chains, spoke about being given part-time hours despite being with the same company for decades. Others expressed concerns about “wage theft” [failing to pay workers for all hours worked, not paying for overtime, etc.], with warehouse workers and others stating that they have filed claims against employers.
City Attorney Charles Parkin said at the meeting that, if the city were to move forward with a minimum wage ordinance, wage theft might have to be addressed in required enforcement of the law. He said wage theft is not necessarily a separate issue from minimum wage and should be taken into account.
Jack Smith, boardmember of the Long Beach Central Project Area Council, Inc. and a member of the city’s task force on medical marijuana, said raising the minimum wage may impact the ability of low-income residents to receive government assistance, such as food stamps and child care, since wages would be raised above a certain threshold.
Lee Vieira, president of East Anaheim Street Business Alliance and a manager of a mortgage company, said raising the minimum wage will likely drive businesses out of the city and cause prices throughout the city to increase.
“When government tries to make everything better for everybody, they typically fail,” he said, adding that moving forward with such a law would only create more “unintended consequences and make everything more expensive.”
The next minimum wage meeting open to the public is November 17 at noon at Admiral Kidd Park, 2125 Santa Fe Ave.