A straight minimum wage increase without any exemptions, delays or mitigations received overwhelming opposition from Long Beach businesses and nonprofits in an online survey conducted by the city’s largest business advocacy group.

 

The Long Beach Council of Business Associations (COBA), which represents business improvement districts (BIDs) and business associations throughout the city, released the results of a study today on potential impacts of Long Beach establishing a minimum wage.

 

The study conducted by Long Beach-based S. Groner Associates (SGA) included gathering feedback from employers through seven focus groups and carrying out an online survey of 408 employers, including 355 businesses and 53 nonprofits.

 

The survey found that support of a straight minimum wage increase was “very low,” with only about 30 respondents stating they strongly support such a proposal and about 140 respondents stating they are strongly against.

 

Adding mitigation strategies, however, “bolstered support” of a minimum wage hike, the survey concluded. While there was no clear preference for any particular mitigation measure, increasing the minimum wage at the statewide level rather than at the city level received the most support from respondents.

 

The survey also found that 34 percent (the highest percentage) of respondents would raise prices to cover higher labor costs while 30 percent would eliminate employees, 13 percent would reduce employee benefits, 9 percent would cut costs internally, 8 percent would reduce discounts and 9 percent would reduce advertising.

 

In terms of who would bear the cost of mandating a higher minimum wage, the survey found that employees would cover a large portion (43 percent) by having their hours cut or by being laid off. Consumers would cover 42 percent of the higher labor costs by paying higher prices for services while 15 percent would be absorbed internally.

 

“Some [employees] will be winners by having their wage increased, but some of them will be losers,” Groner said. “[Employers] only got so much margin to play with.”

 

COBA’s recommendation includes raising the minimum wage in Long Beach (above the state’s minimum wage that raises to $10 an hour on January 1) to $12.50 an hour incrementally over a five-year period ending in 2020. The recommendation also proposes a “total compensation” model used in the City of Sacramento that employers be allowed to include medical benefits, paid sick days and paid time off as part of the obligation to meet the city’s higher mandated minimum wage.

 

COBA is also recommending that there be a one-year delay for small businesses with fewer than 25 employees and a two-year delay for nonprofits. In addition, COBA advocates that workers 21 years old or younger be exempt from the city’s mandate and be paid the state’s minimum wage.

 

COBA will present its recommendation and study during a meeting of the Long Beach Economic Development Commission on January 6 at city hall.