LOS ANGELES—Its numbers have slipped from earlier highs, but Los Angeles still boasts more jobs making jeans, jackets and other apparel than any other pocket of the country.
Manufacturers and designers now fear “Made in L.A.” is under threat from a new law set to boost the city’s minimum wage to $15 an hour by 2020.
The city’s wage law, which will raise the base pay by 50% over five years, serves as a test for urban minimum wages. Advocates say it will provide much needed help for working families but manufacturers warn it will undercut their competitiveness and drive them out of town.
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San Francisco and Seattle have already moved to establish an eventual $15-an-hour pay floor, but Los Angeles marks the first time a city with a large low-wage manufacturing base has decided to raise its wage floor so high. As a result, what happens in Los Angeles will be closely watched elsewhere. At least eight cities, including St. Louis, New York and Washington, D.C., are now evaluating their own proposals to raise the minimum to $15 an hour.
Los Angeles Mayor Eric Garcetti is among many proponents of the new law who argue it will help Los Angeles attract and retain more-productive workers, ultimately saving employers money in lower training and hiring costs. What’s more, workers will have more income to spend in the local economy.
Speaking Wednesday in Washington, Mr. Garcetti referenced a study from the Los Angeles Economic Development Corp. that found no respondents intended to relocate in response to a higher minimum wage, and only a small minority said they would reduce staff.He argued the law will be a benefit to businesses.
“When a billion dollars is put in the pocket of low-income Angelenos, they don’t put that into savings,” he said. “You’ll see that money hit Main Street in a big way and you’ll see that help businesses.”
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A March study by University of California-Berkeley economists commissioned by the city council found that a minimum-wage increase to $15.25 an hour would result in a raise for more than 600,000 workers while costing the city fewer than 3,500 jobs. The study identified apparel manufacturing as an industry most likely to be affected. Payroll costs were estimated to increase 17%, double the rate of other manufacturers.

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Turns out McDonald’s isn’t the only fast food franchise to respond to Seattle’s job-killing minimum wage ordinance by hiring more workers. The Belltown area Subway is advertising on Craigslist, both “full time and part time positions,” with the promise of “Wages goes up to $13.00/Hour on 01/01/2016.” *
Which is weird, because the International Franchise Association has assured us that Seattle’s three-year phase-in to $15 an hour would drive their members out of business, and yet franchisees are not only continuing to hire workers, they’re using our higher minimum wage to lure applicants in Seattle’s increasingly competitive labor market.
Go figure.
http://civicskunkworks.com/seattle-subway-franchise-lures-job-applicants-with-promise-of-13-minimum-wage/
Maybe spending less on lobbying for doom will pan out. The robots are learning to sew everything and the people who worked that are out of luck. People need to eat.
$15 for real Angelenos. But $35 for Mexican citizens, and $40 for Chinese and Indian. No, make that $50.
And for overdressed Iranians, $75.
Yeah, but the U.S. jeans manufacturers more or less operate the luxury brand market. They things expensive, sometimes bespoke items almost nobody needs at the price point; hence luxury items. That blog pushes the progressive notion fast food work is serious and professional. Anything but. Outside being a manager of an eaterie, it’s what used to be considered entry-level or summer jobs.
Mexico does it. They don’t practice salary discrimination but income discrimination. They require immigrants to have higher paying jobs or else they won’t let them stay. It’s that sci-fi notion that Americans can’t seem to get that, if you’re going to be open to immigration, you should attract a better class of people than what’s in your underclass.
Ron Unz is for the minimum wage. His reasoning is that government (and therefore, the taxpayer) is subsidizing employers whose employees are paid so little that they need government assistance (food stamps, etc.) And that’s contrary to “free market.” Apparently, his notion of free market includes government mandating the starting wage.
Of course, the minimum wage destroys low end jobs. The evidence is overwhelming, but politics is about getting votes, and working poor people tend to vote for politicians who promise them a very tangible and dramatic wage increase, not for politicians who promise them the far more abstract benefit of being able to still have jobs a few years down the road.
I strongly suspect that this meshes with Ron’s open border mantra, though. It’s my understanding (but I may be wrong) that Unz has promoted the idea that an increase in the minimum wage will decrease illegal immigration because it will destroy jobs at the bottom end of the wage scale, making the US less attractive to illegals. Again, I may be wrong about this…I’ve only found other people’s accounts of what Ron has said. I’m second guessing myself because the idea seems too absurd for anyone to take it seriously.
What’s going to happen is that $30,000 a year starting jobs will bring a new flood of illegals in who will work for $15,000 a year (and maybe less.) Isn’t that what the fruit growers and roofing contractors tell us all of the time? They can’t get hard workers who’ll work for little pay, so they hire illegals? Of course, if you’re of the open borders mindset, this is a good thing.
Ron says, “if the a business can’t pay this wage, they should go out of business.” So what does a a person who’s starting a lawn service or nail salon in the poor part of town supposed to do? I know a black guy who’s helped provide his family with a decent living by operating an auto detailing shop in the black part of town. Is he supposed to be able to pay these kind of wages?
Turns out McDonald’s isn’t the only fast food franchise to respond to Seattle’s job-killing minimum wage ordinance by hiring more workers. The Belltown area Subway is advertising on Craigslist, both “full time and part time positions,” with the promise of “Wages goes up to $13.00/Hour on 01/01/2016.” *
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McDonald’s? Subway? You’re not getting it, my friend.
What about the independent small business owner? I can promise you that most of them will disappear, at least in the low end service sector. Small appliance repair type or small job contractors or cafes or restaurants in poor parts of town. If you drive through those places – especially in small rural communities with sub-5000 populations – many of these businesses are the only ray of hope for these blighted areas.
Yes, I see ” now hiring” signs around here for low end jobs, too. The thing is that wages need to be set so that jobs won’t be lost when things are bad.
Of course, we could just fill up those areas with McDonalds and Subways and Walmarts, and then say, “problem solved,” but that creates it’s own problem. Why? I’ll let you connect the dots with this photo:
Yes, one job ad for a corporation definitely proves the long run effect of a huge cost increase to service businesses.
The thing that people like you miss is that market forces will ALWAYS eventually win. The USSR controlled everything until it collapsed. Small business owners will doggedly hold on for years to not destroy their credit and make nothing. It can easily be five years until they sigh with relief and shut up shop. Corporations can make dumb mistakes for a very long time due to cheap debt. When stress hits (i.e. 2008/2009) they dump non-performing stores. Look up Starbucks in Florida during the slump.
Personally I think low end workers should make in the $20.00 – $25.00 range. The way to get there is to create good conditions for business. The hurdles in this country are huge. As an immigrant from another first world country I can assure anyone who cares that the US is an awful country to run a small/medium sized business. Most Americans are (justifiably) scared of jumping into and running a business. I get asked all the time for advise about how to quit corporate jobs and run a business. My advise is simple: don’t. I am successful which is why people ask but if I knew what I would have to do I would not have done it.
Forcing a higher than market wage will help some people temporarily. Like every other attempt to circumvent reality it will hurt low end workers over the long term.
What this is really about is Los Angeles Big Gov being able to collect more taxes. More income, more taxes.
Got to make up for that lost money from city gasoline taxes now that dumb Angelenos are being coerced into driving silly hybrids …which are known to be environmentally unfriendly.
And what is the background of those doing these minimum wage “studies”?
How long before the unions ask for “relief ” of the minimum wage for union -organized businesses?
Yes, I’ve pointed this out myself on other posts. Allan Wall of Vdare.com had a good article on Mexico’s practice a few years back, but search as I may, I can’t find it. Know of any others?
This is the article… I randomly found it again a few days ago (I like link hopping through articles) and searched it now by the “400 times the minimum wage” claim, to find it for you
http://www.vdare.com/articles/memo-from-mexico-by-allan-wall-46
Of course, the minimum wage destroys low end jobs.
Could you list examples of these low end jobs that are subject to such destruction?
I’ve heard this argument before, but I want to make sure that I’m on the same page with what such “low end jobs” are.
If the minimum wage going up is bad for business, then has the inflation driven debasement of the minimum wage created a jobs bonanza?
Jobs that pay minimum wage, are repetitive, and therefore easily automated. Many fast food places in Europe don’t have cashiers, because of labor costs/laws. Social trust is also higher.
The Japanese also have a far higher level of vending machines per capita.
It is like watching Kafka rearrange chairs on the Titanic.
The same corporate dupes that squawked in unison about the need for “free trade,” and shipped our manufacturing jobs offshore, now wail that the world will end if the working poor are paid a living wage for the few shitty jobs left – well guess what, the two are directly related.
Then, on the other side of the short bus, the open borders crowd, and supposed champions of the working poor, howl that importing more cheap labour will somehow be good for everybody.
No wonder I drink.