Effects of a Fifteen Dollar an Hour Minimum Wage in the City of Los Angeles

Effects of a Fifteen Dollar an Hour Minimum Wage in the City of Los Angeles

America has lost ground on the intent declared by Congress when the Fair Labor Standards Act was enacted in 1938, that workers will receive wages sufficient to maintain “the minimum standard of living necessary for health, efficiency, and general well-being.” The federal minimum wage had the greatest value in 1968. Set at $1.60 an hour, it had a value of $10.51 in 2012 dollars. The current federal minimum wage of $7.25 is worth 31 percent less. This wage attrition is part of most people’s every day experience:

◾Three-quarters of the full-time labor force residing in the City of Los Angeles earn less than comparable workers 30 years ago.
◾Wage erosion was greatest for workers in the bottom half of the wage scale. From 1979 to 2011, annual pay dropped 14 percent for workers in the 50th percentile – the median or typical worker, and 26 percent for workers in the 25th percentile – the working poor.
◾The average hourly wage for all workers residing in the City of Los Angeles in 2013 is estimated to be $27.85, yielding estimated annual pay of $58,244 for the average wage and salary worker.
◾Forty-six percent of LA’s wage and salary workers are paid less than $15 an hour. This includes 41 percent of the 1,097,000 full-time employees and 54 percent of the 665,000 part-time employees who live in the City of Los Angeles.




Economic Stimulus

When workers’ households receive additional income, their increased spending stimulates growth in the local economy. Their increased purchases of groceries, clothes, meals out, health care, car repair services, and rental housing stimulates added purchases in the local supply chain. Jobs would be created in the same industries where workers would receive wage increases, including restaurants and retail stores. The increased buying power of workers would make these industries direct beneficiaries of the higher wages they would be paying.

The increased spending translates into added sales for local businesses and their suppliers, as well as added jobs at those businesses and their suppliers, and increased tax revenue for local, state and federal government.


http://economicrt.org/publication/effects-of-a-fifteen-dollar-an-hour-minimum-wage-in-the-city-of-los-angeles/