LA minimum wage hike concerns Burbank, Glendale businesses

A San Fernando Valley business group delayed taking a position on Mayor Eric Garcetti's yet-to-be unveiled plan to raise minimum wages. (Allen J. Schaben / Los Angeles Times / June 12, 2013)

Following extended debate, a San Fernando Valley-based business group delayed voting Thursday on Los Angeles Mayor Eric Garcetti's soon-to-be-unveiled plan to hike the city's minimum wage to $13.25 an hour by 2017, the Los Angeles Times reported.

Stuart Waldman, executive director of Valley Industry & Commerce Assn., said board members had serious misgivings about the mayor's proposal but decided to give him "an opportunity to make his pitch" for wage hikes before taking a position. The mayor is expected to announce his plan on Labor Day.

VICA will invite the mayor to address its 80-member board directly, Waldman said. "Not only about this policy but his comprehensive policy for bringing jobs to the city of Los Angeles and to stimulate the economy."

A spokesman for Garcetti declined to comment on the VICA delay. While the mayor has not officially unveiled his plan for an hourly wage boost the basic outlines have been confirmed by City Hall officials and business leaders who have been briefed.

Under the proposal being shopped around, the city's minimum wage would immediately rise from $9 to $10.25 an hour, and then go up $1.50 an hour in the two succeeding years. In 2017, any further increases would be linked to the consumer price index for the L.A. metropolitan area.

Garcetti was asked about the wage hike Thursday morning by the radio hosts of "Ask the Mayor," a regular segment on KNX 1070-AM. He responded that raising the minimum wage was a priority of his because the current base income is too low for Angelenos to support themselves.

"The recession is lagging because we don't have buying power at the bottom end of the economic scale, so that means poorer people right now have no money to spend and our shops and everything else [is] suffering,'' he said.

Los Angeles has 1 million people living in poverty, the mayor said, adding that many business owners have told him they would support a boost.

"We can't be one of the poorest towns in America anymore,'' Garcetti told the radio audience.

A boost in minimum wages is one of the mayor's most ambitious proposals yet and is already provoking strong reactions. Louis Lopez, owner of an auto parts store in Atwater Village, predicted that mom-and-pop shops like his will be "severely impacted."

"Our community is located just next to the city of Glendale, which does not burden small businesses with a high minimum wage requirement,'' said Lopez, who serves on the board of his local chamber of commerce.

Other business owners voice conditional support.

Andy Wiederhorn, chief executive of Fatburger, with more than 30 outlets in Los Angeles, said the price of burgers would likely go up at least 50 cents to make up for wage hikes.

Restaurants in particular operate on such a narrow margin, he said, that increased labor costs will quickly eat up profits. So it becomes a balance between providing livable wages and keeping customers coming back for more.

"Every employer who has some compassion for his employees wants them to have more wages and benefits,'' Wiederhorn said. "The issue is what's the cost to consumers?" 

Times staff writer Soumya Karlamangla contributed to this report.