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Valley Businesses Mull Minimum Wage Hike

Kevin Mallory |
September 9, 2014 | 12:04 a.m. PDT

Contributor

After Los Angeles Mayor Eric Garcetti revealed his proposal to raise the city’s minimum wage to $13.25 per hour on Sep. 1, the debate between workers and businesses owners throughout Los Angeles shows no sign of slowing down.

“We can’t afford not to do it,” said Cedillo, who represents constituents of Los Angeles City Council District 1. “Unless the residents of the poorest neighborhoods get paid more, they will never buy a cup of Starbucks. It’s that simple. Unless we put more money in their pocket, we’ll never get more money in the economy.”

Still, some local business owners in the San Fernando Valley are worried about any increase in costs that could come with paying more.

Robert Romanos, owner of Bob's Espresso Bar in North Hollywood. (Kevin Mallory/Neon Tommy)
Robert Romanos, owner of Bob's Espresso Bar in North Hollywood. (Kevin Mallory/Neon Tommy)

“It’s already very expensive to run a small business,” said Robert Romanos, owner of Bob’s Espresso Bar in North Hollywood. “What you’re doing is cutting more into my profit. I think it very well drive me out of business.”

Romanos, who says he already pays his employees $10 per hour, believes the city should meet businesses halfway if the mayor’s proposal is approved.

“I understand that people have to make a livable wage,” Romanos said. “If you want people to make more money at a minimum wage job, then you need to cut the business owners some slack. What they ought to do is give us tax breaks.”

SEE ALSO: Local Restaurant Owners Oppose Garcetti's Minimum Wage Increase 

Romanus described Los Angeles as very unfriendly to business, charging business owners numerous taxes and fees. “I could pay my employees more if I didn’t have to pay the government more.”

Civic leaders have also been voicing their concerns, stating that this latest policy initiative could end up doing more harm than good.

“If the employer has to just automatically raise wages because he or she is told to, it might raise costs above what they can recover,” said Victor Viereck, Chair for the Universal City North Hollywood Chamber of Commerce Government Affairs Committee.

Viereck believes that the options businesses would consider to cut costs could end up hurting employees and customers. “Cutting those costs might be a matter of cutting back on the number of employees that you hire. You could try to raise prices, but that’s not always easy to do, either.

Garcetti enlisted the counsel of economists from the University of California-Berkeley to counter such criticism, and believes the policy will end up benefitting city businesses.

“Research shows that a higher minimum wage would reduce worker turnover, absenteeism, provides greater stability and productivity while lowering recruiting and training costs for business.” Garcetti said. According to a study conducted by UC-Berkeley, about 567,000 workers would receive a pay raise by 2017 under the proposed law.

But some employers are not worried about the minimum wage increase adversely affecting their business. In fact, they support the proposal.

Alvaro Ornelas, owner of Pepe's New York Pizza in Studio City. (Kevin Mallory/Neon Tommy)
Alvaro Ornelas, owner of Pepe's New York Pizza in Studio City. (Kevin Mallory/Neon Tommy)

“It won’t affect my business,” said Alvaro Ornelas, owner of Pepe’s New York Pizza in Studio City. “I’ll be able to keep my employees.”

Ornelas, whose shop has four employees, said he would be happy to pay his employees more in order for them to afford the increasing cost of living in Los Angeles. “In order for me to get the money that I’m going to be paying more to my employees, I’m going to raise the prices,” Ornelas explained.

“Everything is going up, so the employees deserve to get a little raise, too. I agree with the mayor’s proposal.”

Like other business owners in Los Angeles, Ornelas would like to see the city relax on the number of taxes and fees it imposes.

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

But for workers, the increase is needed to afford just basic necessities. A recent UCLA study discovered that Los Angeles has the least affordable housing in the nation. On average, Los Angeles residents put 47 percent of their income towards rent.

“This is about the dignity of being a human being,” said Rabbi Susan Goldberg of the Wilshire Boulevard Temple. Goldberg recounted that people line up at her temple’s weekly food pantry despite working one or more jobs.

“It’s one thing to give out food, it’s another to do the righteous work of changing the way things are in this city so that every human being who works has the dignity of a living wage.”

Contact Contributor Kevin Mallory here



 

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