The minimum wages increases passed by the City of Los Angeles may have the greatest impacts on workers of color and low-income families, according to the findings of a recently published impact study conducted by researchers at U.C. Berkeley.
This study specifically focused on determining the possible effects of the multi-phase minimum wage increases planned for Los Angeles County over the next three years or so. Headed up by the Institute for Research on Labor & Employment (IRLE) at U.C. Berkeley, the study concentrated on identifying the possible consequences that the annualized minimum wage increases could have on both employees and businesses over the coming years.
According to this impact study, the rising minimum wage in Los Angeles over the next few years will likely result in impacts that include (but may not be limited to) the following:
- Significant pay increases for workers – By 2019, at least 41 percent of “covered workers” are expected to be receiving the proposed increases to their wages. While the majority of these workers will be in the private, for-profit sector, those who do receive the minimum wage increase can generally expect to see their annual earnings increase by roughly $4,800.
- Slightly increased operating costs for businesses – By 2019, businesses in Los Angeles can generally expect to see a 0.9 percent increase in their operating costs (partly due to the rising minimum wage costs/labor costs). These elevated costs will most likely be offset by raising prices for customers, these researchers have predicted.
- Other benefits for businesses – Although businesses will likely see increasing operating costs over the coming years, these costs will likely be offset by some other benefits, such as increased worker productivity and falling turnover rates. This pair of benefits is expected to have significant advantages for Los Angeles employers, particularly when it comes to their bottom lines and profits.
Commenting on these findings, one of the study’s authors, Ken Jacobs, chair of UC Berkeley’s IRLE, has stated:
Raising prices does have some effect on demand. But you also have higher demand from those who now have more money in their pockets, and these balance each other out.
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