The Los Angeles City Council has voted to raise the minimum wage to $15 within the next five years. The law was voted on Tuesday, the 19th of May 2015. Thus, by 2020, the current minimum wage of $ 9 will increase by more than 65 percent. Out of the 15 members of the council who voted, 14 were for and only one against the hike.
However, only large companies, those that have more than 25 employees will have to comply to the new law. For the smaller ones, the increase will occur at a much smaller pace. The latter will have to submit to the new regulation by 2021.
This new escalation in wages was long due, given the nine million jobs lost across the U.S. during the economic crisis, which has also frozen wages in many states and has slowed down their increase rate in others.
Thus, starting with 2016, workers from Los Angeles will get a minimum wage of $ 10.50 and this rate will go up every year until it reaches $ 15. “Today, help is on the way for the 1 million Angelenos who live in poverty,” stated L.A. Mayor Eric Garcetti.
Los Angeles joins other major cities such as Seattle and San Francisco, which also aim at phasing the current wage to $ 15 by 2017 and 2018, respectively. The council in New York is also planning to increase the wage to $ 15 minimum by 2019, while Chicago is planning to boost it to $13 by 2019.
The federal minimum wage has been the same since 2009 – $ 7.25. Therefore, various groups have been pushing for an enactment of wage hikes ever since. The main reason is the fact that the wages have failed to keep up with the cost of living, leading to increased poverty in many parts of the country.
The law has already met some criticism, as it is regarded as impractical and it would place too much pressure on large businesses, which will have to dismiss many of their workers in order to cover such high costs. Moreover, according to senior vice president of public policy in Los Angeles Area Chamber of Commerce, Ruben Gonzales, there is not enough profit recorded with businesses to enable them to cover an increase of more than 50 percent within a few years.
Regardless of the fact that the regulation might meet some opposition, this is still a huge step forward for the nation. It shows that America is indeed making progress and leaving the recession behind.
Image Source: Realclearmarkets