The Mayor of Los Angeles’ Proposed City Minimum Wage Policy

A Prospective Impact Study

The Mayor of Los Angeles has requested that UC Berkeley’s Institute for Research on Labor and Employment conduct an impact study of his proposed minimum wage law for the city of Los Angeles. The proposal under consideration would establish a minimum wage of $13.25 an hour for businesses operating in the city by 2017. The minimum wage would be raised to $10.25 an hour in 2015; to $11.75 in 2016; and to $13.25 in 2017 (see Table 1). It would then be indexed to inflation in subsequent years. The proposed law would cover everyone who works in Los Angeles (except state and federal government employees and the self-employed).

In this report, we first estimate the number of workers that would be affected by the law and describe their demographic and job characteristics. We next estimate the resulting increase in wages and analyze their likely impacts on business costs, prices and employment, drawing in part on previous research. We then compare the magnitude of the proposed increase to those in existing local minimum wage laws.