Business concerns stall minimum wage vote by L.A. County board

The campaign to push Los Angeles County to significantly raise the minimum wage suffered an unexpected setback Tuesday, with a key county supervisor demanding a postponement to address complaints from small-business owners.

Labor unions and other supporters had been lobbying the Los Angeles County Board of Supervisors to follow the Los Angeles City Council and boost the minimum wage in unincorporated areas to $15 an hour in five years for large businesses and six years for those with fewer than 26 employees. They hoped the county’s support would prompt other local cities to follow suit, leaving L.A. less isolated with its higher wages.

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FOR THE RECORD: A previous version of this post said a report on the minimum wage had been completed by the Los Angeles County Economic Development Commission. The report was completed by the Los Angeles County Economic Development Corporation.

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The swing vote on the plan is Supervisor Hilda Solis, a Democrat, union ally and former U.S. Secretary of Labor in the Obama administration. Solis asked for the delay after hearing complaints from constituents. County officials and labor leaders still expect the Board of Supervisors to approve the hike.

But Solis’ hesitation spotlights the conflicting political forces she must balance in addressing the issue.

She was elected last year with heavy support from unions backing the wage increase, as well as endorsements from major business groups that have opposed it. Along with two other Democratic supervisors, Sheila Kuehl, who proposed the wage increase, and Mark Ridley-Thomas, Solis makes up a new labor-allied majority on the five-member board.

But Solis joined Don Knabe and Michael Antonovich, the two Republicans on the five-member county board, Tuesday in raising questions about how the increase would affect businesses, particularly smaller enterprises.

“I care very deeply about what happens to those mom and pop businesses and nonprofits,” she said.

Solis’ district includes unincorporated, county-administered East Los Angeles, a heavily Latino community with commercial corridors crowded with restaurants and shops — businesses where owners often have just a few employees and eke by on low incomes themselves. Some shop owners there have complained of neglect by the county, and some have joined in attempts to break away and form their own city.

If approved, the wage increase would apply to the majority of the county’s geographic footprint, and the nearly 400,000 workers in unincorporated areas who make up about 10% of the countywide workforce. Combined with the recent city move, half the workers in L.A. County would be guaranteed at least $15 an hour by 2021.

Solis reiterated Tuesday she wants to raise the minimum wage. But she said the county lacks adequate information on the effects the current proposal would have on small commercial enterprises in county-controlled areas. She also called for county officials to develop a broad plan to assist businesses transitioning to higher wages, including streamlining the permitting process and offering training to workers.

Jaime Regalado, a retired Cal State Los Angeles professor who has watched Solis’ long career in public office, said she has always been close to small business owners, as well as labor and working-class families, and is probably feeling “intense pressure from competing interests.”

“She is being smart and doing her due diligence” in seeking the delay, said Regalado.

Proponents of the wage increase, including labor groups that have been allied with Solis, voiced little concern over the postponement.

“This is a momentary delay. We look forward to working with Supervisor Kuehl and the rest of the county supervisors to continue a thoughtful process that crafts the best possible policy to lift working families out of poverty,” said Rusty Hicks, executive secretary-treasurer of the Los Angeles County Federation of Labor and a leader of the Raise the Wage campaign.

Los Angeles Mayor Eric Garcetti appealed to the county board to follow his city’s lead on the minimum wage.

Ridley-Thomas said he expected the board to move ahead next month, not only on the minimum wage, but on a higher base wage for county contractors. Kuehl said she was disappointed by Tuesday’s delay, but didn’t view it as a significant setback.

“A setback would be if it failed and I had to think about bringing it back next year,” she said. “...I think it’s clear that [Solis] cares about working people, as do I.”

Garcetti said county adoption of the minimum wage proposal would put the Los Angeles area “past the tipping point.” He predicted other cities would follow suit to avoid losing the most qualified workers to higher-wage areas.

Some cities, including Santa Monica and West Hollywood, are already considering raising the minimum wage. However, larger cities in the county, including Pasadena and Long Beach, have remained on the sidelines of the debate.

A spokeswoman for Long Beach said the city’s mayor and the City Council support legislation to increase the federal and state minimum wages, but haven’t proposed a city-imposed wage increase. A county-commissioned report by the Los Angeles Economic Development Corp. released last week found that among 1,000 businesses surveyed across the county, none expected to close or move as a result of a higher minimum wage. Most said they would raise prices to offset higher labor costs, and some said they might cut jobs.

The report did not break out responses from entities in unincorporated areas, as opposed to those in Los Angeles or other cities, and did not analyze which responses had come from nonprofits. Antonovich and Solis criticized those omissions Tuesday.

Eddie Torres, owner of a commercial sign business and a board member with the East Los Angeles Chamber of Commerce, said many businesses there won’t be able to pay the higher wage and will have a hard time raising prices, meaning they will have to cut back the number of workers they employ.

“We don’t see it being beneficial to anybody, because at least the people who have jobs right now, they have jobs,” he said.

Soo Kim, manager of Fashion Expo on Whittier Boulevard, said a mandatory minimum wage hike “isn’t right” because the economy is barely recovering.

“Store owners will cut hours,” Kim, 45, said as she organized dresses on racks. “People will lose jobs because $15 is too high…. They should make rents lower, not force the wage higher.”

But David Perlmutter, who employs eight people in his jewelry store that sits on a busy swath of Whittier Boulevard, said most of his employees already make about $15.

“I think it’s fair to pay for the cost of living,” he said. “From my standpoint, I think $9 or $10 per hour is poverty level. Especially in Los Angeles.”

Supervisors will revisit the minimum wage proposal July 21. The county’s proposal so far does not address a series of sticky issues that heightened the controversy over the city minimum-wage increase, including whether to require paid sick days and whether to offer union shop employees an exemption from the wage requirements.

Amid concerns voiced by small businesses, Los Angeles County supervisors on Tuesday delayed a vote to increase the minimum wage in county unincorporated areas from $9 to $15 over the next five years.

Many observers expected the proposal by Supervisor Sheila Kuehl, which mirrored an increase recently approved by the city of Los Angeles, to be adopted Tuesday.

But the five-member board’s two Republicans, Don Knabe and Michael Antonovich, were joined by Supervisor Hilda Solis, a Democrat and former U.S. Secretary of Labor elected last year with heavy union support, in raising questions about how the increase would affect businesses.

Solis represents the unincorporated East Los Angeles area, which has many very small businesses with only a few employees that have pushed back against the proposed wage hike.

Follow Abby Sewell on Twitter at @sewella for more county news.