In Minimum Wage Battle, Garcetti and Organized Labor Rarely Saw Eye-to-Eye

Mayor Eric Garcetti
Mayor Eric Garcetti
Photo by Michael Locke / via Flickr

Mayor Eric Garcetti can rightly take credit for the city's $15 minimum wage, which the L.A. City Council approved today. In his two years in office, no other initiative has had such a sweeping impact. It will dramatically change the way business is done in the city, raising wages for nearly 1 million people.

In pushing for the wage increase, Garcetti often found himself at odds with Rusty Hicks, the executive secretary-treasurer of the L.A. County Federation of Labor. Both shared the same goal — lifting low-wage workers out of poverty. But they had different ideas on how to get there. The final version of the ordinance was shaped in large measure by the tension between the two.

Here are five key disagreements:

1. Whether to do a citywide minimum wage at all

Garcetti kicked off the effort to establish a citywide minimum wage last fall. At the time, the L.A. County Federation of Labor was focused on a much narrower issue: whether to increase the wage for downtown hotel workers.

That measure was near and dear to Maria Elena Durazo, who was then in charge of the county federation. It gave a boost to UNITE HERE, the union that represents hotel employees, which is also where Durazo began her career as an organizer. The measure mandated a $15.37 minimum wage for downtown hotel workers, but only for those not represented by a union. It thus created a powerful incentive for downtown hotels to recognize UNITE HERE.

Though he agreed to sign the hotel measure, Garcetti had long had reservations about it. Early in 2014, he suggested that it did not make sense to raise the wage only for such a narrow group. Soon thereafter, he began working on a citywide proposal.

Shortly after the council approved the ordinance in late September, Durazo stepped down and took a job as vice president at UNITE HERE. Hicks, the federation's 35-year-old political director, took charge.

2. What the minimum wage should be

Garcetti had studied ordinances in other cities, including a $15 minimum in Seattle and a proposal in Chicago to go to $13. While Garcetti was eager to follow suit, he was also cautious about the effect on businesses. He chose a figure that was closer to Chicago's plan than Seattle's, proposing to raise the minimum wage to $13.25 by 2017.

Once Garcetti made the first move, the L.A. County Federation of Labor was quick to agree to a citywide wage and to raise the ante. Labor activists across the country have been pushing for a $15 minimum, and that's the figure that the federation wanted as well. Labor allies on the City Council, led by Mike Bonin, quickly one-upped the mayor, introducing a proposal to reach $15.25 by 2019. 

In effect, this was an argument about timing. Garcetti's proposal called for inflation indexing, so under his plan the wage would have reached $15 by 2022 or 2023. In the end, the council took the middle path, reaching $15 by July 1, 2020, for large employers and July 1, 2021 for small employers.

3. Enforcement

Aside from the actual wage figures, there were disagreement on a host of ancillary issues. Labor groups argued that the city could not raise the minimum wage without also making sure that the law was enforced. Otherwise, unscrupulous employers could pay their workers less than the minimum wage under the table, and the employees would have little to no recourse.

In San Francisco and Seattle, cities have established labor standards bureaus, with investigators who perform audits and arbitrators who can levy fines against violators. The L.A County Federation of Labor pressed for seed funding to establish a similar bureau in L.A.

But Garcetti did not go along with the idea, at one point saying that the city did not have the resources to hire a bunch of investigators. The City Council's Budget and Finance committee sided with labor, setting aside $500,000 for five investigators.

4. Paid time off

Perhaps the most contentious element of the proposal was over paid time off. The state recently passed a law mandating three days of paid sick time. Hicks pushed hard for an increase above that for all employers within L.A. boundaries. Last week, the council's Economic Development Committee slipped in a measure that would have mandated 12 days of paid sick and vacation time.

Garcetti balked, apparently sensitive to businesses who were already getting hammered on every other aspect of the proposal. While he did not take a position on the substance of the issue, he said it needed more study. Under pressure, the council agreed to back off. The issue is expected to resurface next month, but was removed from the minimum wage ordinance.

5. Inflation

Garcetti's original proposal called for inflation indexing after the wage reached $13.25 in 2017, based on the Consumer Price Index. The Economic Development Committee — again at the behest of labor — changed the calculation to an average of the CPI for the previous 20 years. That would have resulted in a very stable cost-of-living adjustment of about 2.3 percent per year. 

Garcetti raised some objections about that. Business groups did not want any CPI indexing, but averaging the CPI over 20 years arguably would have been worse for employers. During a recession, prices would flatten out but they would still owe their minimum wage workers a 2.3 percent raise. In today's version of the ordinance, the council reverted to Garcetti's plan.

It would be to simple to say that either Hicks or Garcetti got the better of this debate. On item 1, Garcetti led the way but labor quickly followed. Item 2 is essentially a draw. Hicks won on item 3 and Garcetti got his way on items 4 and 5.

In the end, the ordinance is the product of their uneasy rivalry.


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