Los Angeles Rising: A City that Works for Everyone
Economic Roundtable Research Report, March 2015
162 Pages Posted: 18 Aug 2016
Date Written: March 19, 2015
Abstract
For many, Los Angeles evokes images of year-round sunshine and celebrity, a dream city of wealth and possibility. Yet in reality, half of L.A. residents living in poverty are employed, showing that low wages drive poverty as much as unemployment does. The benefits and consequences of raising Los Angeles’s minimum wage to $15.25 will be an increase of $5.9 billion in wages with a stimulus effect for the region. Raising the minimum wage will geographically address inequality. In particular, it has strong benefits on low-income areas in the region.
Industries in Los Angeles are predominantly resilient. Many industries have few low wage workers. Most that do employ low-wage workers are providing services to more affluent residents who can adjust to price increases that may result from a higher minimum wage. In these industries, Los Angeles residents provide services to other Los Angeles residents, but do not earn enough to make ends meet.
Seven industries may be adversely affected by the wage increase and are particularly important to monitor during the five annual increments of wage increases. These industries account for roughly a fifth of the jobs in Los Angeles. Within these industries with greater risks of unintended consequences, firms with over 100 employees have high levels of resilience for adjusting to higher labor costs through investments in technology and human capital. Six of the seven industries are in the service sector where consumer demand is expected to support necessary price increases.
Keywords: Business, Cost of Living, Direct, Earnings, Economy, Employment, Enforcement, Family, Growth, Impacts, Income, Increase, Indicators, Indirect, Induced, Industry, Jobs, Los Angeles, Low, Manufacturing, Minimum, Overcrowding, Payroll, Poverty, Rent Burden, Resilience, Risk, Stimulus, Wage, Work
JEL Classification: C81, H11, I31, J21, J23, J24, J61, J64, J68, L52, M53, O15, O21, R52, R58
Suggested Citation: Suggested Citation