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Local Restaurant Owners Oppose Garcetti's Minimum Wage Increase

Marah Alindogan |
September 1, 2014 | 9:51 p.m. PDT

Staff Reporter

Fifth District council member Paul Koretz
Fifth District council member Paul Koretz

A lemon? That will cost you an extra 50 cents. Some onions? Another 50 cents, please. 

On a hot and humid Labor Day afternoon at Martin Luther King Jr. park, Los Angeles Mayor Eric Garcetti led a crowd of Angelenos into a chant: “We are going to raise the wage, LA!”

With the gap between low-income and high-income workers larger than ever, Garcetti's new minimum wage proposal, calls for an increase in the minimum wage from $9 to $13.25 an hour by 2017. 

Yet just a twenty minute drive away in Los Angeles’ Fifth District, local restaurant owners did not feel moved by the same spirit.

“It’s not going to be good for the economy, for small businesses and for the people,” said Roberto Larach, manager of Enzo's Pizzeria in Westwood.

SEE ALSO: California's Minimum Wage Hike Boosts Workers' Morale

study done by the California Budget Project in 2013 found that low-wage workers had the steepest drop in earnings between 2006 and 2013. High-wage workers, by contrast, saw the smallest decline in earnings over the same period of time. Twenty-seven percent of people living in Los Angeles County are living in poverty, according to an analysis by Stanford University and the Public Policy Institute of California done in 2013. 

“The minimum wage can’t be a poverty wage … a bigger and bigger percentage of people have to live off of that minimum wage," said Garcetti. "This is fair. This is common sense. This is good for business.” 

But many local restaurant owners from L.A.'s Westside remain unconvinced.

SEE ALSO: Wage In Los Angeles: A Look Into Life On The Minimum Wage

Sanjay Patel, owner of Bollywood Bites
Sanjay Patel, owner of Bollywood Bites

Sanjay Patel, the owner of Bollywood Bites, an Indian restaurant located in Westwood Village, is opposed to the potential wage increase because of the high costs already involved in managing a small business. According to Patel, many small businesses in the area go out of business within a few years. 

For Patel, the potential increase could lead to higher costs of both ingredients and labor, which would be reflected in his menu’s prices. 

“My aloo tiki chat masala is $7.99, but if I put it up by 25 cents, people are already asking, 'why did you raise it by 25 cents?’" said Patel. "They don’t understand that everything has gone up.” 

For example, restaurant owners like Patel buy lemons ranging from 85 cents to $1. Sides or condiments that customers expect for free are now putting restaurant owners in a bind because they are basically giving away their own profits. 

“My food costs have been 40 to 50 percent up since a year and a half ago,” said Patel. 

SEE ALSO: Minimum Wage: What You Need To Know

Roberto Larach, manager at Enzo's Pizzeria
Roberto Larach, manager at Enzo's Pizzeria

Similarly, Roberto Larach, manager at Enzo’s Pizzeria in Westwood Village, states that the plan will have its winners and losers, the losers being small businesses. 

“It’ll be good, be great, if the minimum wage goes up and the quality of living stays the same. But everything goes up," said Larach. "We’ve experienced that before—the rent goes up, whatever you pay goes up, everything.” 

But from what Garcetti and Koretz said on Monday, they seem to think that the benefits of boosting wages significantly outweighs the costs. 

“Poverty wages hold back our economic recovery," said Garcetti. "We want businesses thriving on Main Street but if people don’t have money to spend, that can’t happen." 

SEE ALSO: L.A. Public School Workers March To Raise Minimum Wage

Likewise, Koretz, who grew up in a minimum-wage household fully support of the plan, believing that an increase in wages will stimulate the economy, benefitting small businesses. Koretz believes that this would give hundreds and thousands of families more money in their wallets to spend. 

“That's probably why our economy is lagging,” said Koretz of the current minimum wage. “That will be ended.”

With both sides firmly rooted in their views, it is too soon to tell what the impact will be on Los Angeles County.

Reach Staff Reporter Marah Alindogan here and follow her on Twitter here.



 

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