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LA Mayor's $13.25 Minimum Wage Would Benefit 40 Percent Of Workforce

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LOS ANGELES
One analysis of LA's proposed minimum wage hike shows the plan could benefit up to 40 percent of the city's workforce. | Lee Pettet via Getty Images

If Los Angeles raised its minimum wage to $13.25 per hour, roughly 40 percent of the city's workforce would benefit and LA's poverty rate would decline by 4 percent, according to an analysis by the Center for American Progress provided exclusively to The Huffington Post.

On Labor Day, Mayor Eric Garcetti of Los Angeles will introduce a plan to the city council for boosting the city's minimum wage from $9 per hour to $13.25 by 2017, according to a report from the Los Angeles Times.

"The city’s combination of low wage levels and high living costs -- 27 percent above the national average -- means that cash-strapped families will immediately spend that extra income, increasing revenues for local businesses," Rachel West, senior policy analyst at CAP, a left-leaning think-tank, told HuffPost.

West based her calculations on data from the Bureau of Labor Statistics and the LA Chamber of Commerce, and on a study by economist Arindrajit Dube.

She calculated that LA's high poverty rate -- 23.3 percent in 2012 -- would shrink by 4 percent if the plan goes through. Between 500,000 and 600,000 employees currently making less than $13.25 per hour would see their wages increase.

The reaction to the minimum wage proposal was mixed, with the business community predicting job losses from employers leaving the city, and the labor community pushing for a wage increase to $15 per hour instead of just $13.25.

"If Los Angeles is to maintain our standing as a world-class city, we need to increase the minimum wage," billionaire businessman Eli Broad said in a statement about the proposed plan. "Raising the minimum wage would help lift people out of poverty and stimulate our local economy."