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Business owners and city government representatives came together for an original event to learn more about the minimum wage hikes scheduled for the City of Los Angeles. On September 16th, led by Silver Lake Chamber of Commerce, five local, small business groups sponsored a discussion with L.A. City Councilmember Mitch O’Farrell at Silverlake Community Church. O’Farrell’s unexpectedly candid remarks were met with appreciation; absent were the hostilities which were common during the four hearings prior to the minimum wage vote. The discussion was moderated by professional mediator Susan North (Susan North Mediation) and per her instructions, questions and comments were kept respectful and educational.

Councilman O’Farrell warned neighborhood Chambers that they will need to represent their own interests and should work together to do so.

Throughout his career in public office, he has been “all about helping small business and chambers to thrive,” and had been schooled by the likes of Silver Lake Chamber Founder Dr. Cheryl Revkin, D.C. and Executive Director of Atwater Village Chamber Luis Lopez, who were both present.

Small businesses employ ¾ of all employees in L.A. according to O’Farrell, who expressed deep concern for their welfare. O’Farrell was perplexed at the urgency with which the minimum wage legislation was being pushed through. He insisted on four public hearings as a way of “pushing the pause button” before enacting a minimum wage increase, and attended each one. He is not a member of the Economic Development Committee, which oversees minimum wage increases.

David Goodman of Box Bros. expressed his concerns about inflationary upward pressure. His long-term employees (who are making well above minimum wage now) would expect to receive compensation at the same relative pay scale under which they are currently employed and would not be satisfied with a wage commensurate with that of an inexperienced new hire. With this in mind, the impending change in minimum wage would impact not only the 567,000 minimum wage workers (37% of the L.A. workforce) which O’Farrell mentions in his letter to the Council (see below), but may well cause wage increases for all employees of affected businesses. According to www.data.lacity.org, the number of L. A. area businesses is 478,426, of which 28,444 are in CD13.

Restaurants are one of the industries most directly affected by minimum wage increases. O’Farrell’s experience in restaurant management helped him as he analyzed the challenges which an Echo Park “mom and pop” restaurant might experience as a result of the minimum wage increases. He also examined other Western cities’ recent minimum wage increases for unintended consequences such as layoffs, reduced worker hours, reduced federal benefits and business closures. This research prompted his suggestion that the new law consider “total compensation” (including tips and health insurance) as the basis for wages. Understanding the challenges faced by non-profit organizations as well as those businesses hiring first-time employees, he has also pushed for a tiered system. O’Farrell explained that strong resistance to those exemptions seemed to melt, once they were proposed for employers who engaged in collective bargaining. Keller Williams Commercial Realtor Peter Silvester questioned whether union donations could be influencing the lawmakers, to which O’Farrell replied  that you might see patterns emerge.

O’Farrell and the rest of the Council are still waiting for the City Attorney’s office to present a legal opinion on the California minimum wage law, as it pertains to total compensation;  the City Council needs that legal guidance before finalizing their minimum wage package. The proposed incremental City minimum wage increases are detailed in the table below. California State minimum wage is calendared to increase to $10 per hour in January, 2016.

Atwater Village Chamber co-sponsored the event, while Echo Park Chamber, Eagle Rock Chamber, Glassell Park Chamber and Los Feliz Village Business Improvement District also supported. Cupcakes, brownies and coffee were catered by Laura Ann Masura of Auntie Em’s in Eagle Rock.

Facts on Minimum Wage Increase – Provided by City Councilmember Mitch O’Farrell’s Office