Economist Discusses the Impact of Minimum Wage Increases, Pasadena's Economic Future

Published : Thursday, July 20, 2017 | 5:41 AM

Economist Dan Flaming of the Los Angeles research group the Economic Table will share insight and data at the monthly Progressive Discussion Group meeting on Friday about Pasadena’s economic future as the city enters its second annual minimum wage jump, this one to $12.00 just implemented July 1.

Flaming testified before the City Council and its Economic Development Committee during hearings which led to the passage of Pasadena’s minimum wage ordinance and is expected to discuss what some community members see as pushback from local business owners against the newly hiked wages.

“Particularly in Pasadena which is overall an affluent community, there has been a strong sense of equity of ‘yes we can do this,’ and although it doesn’t take workers where they need to be, it’s an important start,” explained Flaming.

“On the one hand, the concern is we want the lives of workers to be better and on the other side is that at the same time we don’t want to tank the economy doing this — that wouldn’t be good for anybody,” Flaming added.

According to Flaming, the minimum wage increase is an issue that is most sensitive for restaurants and restaurant owners because they have a larger share of revenue going toward payroll than any other significant local industry sector, in addition to having the largest share of low paid workers.

The eventual $15.00 an hour wage will increase restaurant payroll costs by approximately eight percent, Flaming claims.

“The biggest strategy is that restaurants raise prices to cover some of it. They also adjust worker’s hours, and in some cases, have workers work fewer hours. There are adjustments that happen in all of this,” explained Flaming.

As part of the monitoring process, the Pasadena City Council in 2019 will review a report summarizing the economic impact of the citywide minimum wage on reducing poverty, unemployment, job creation, and the overall local business climate.

At that time, the City Manager will request direction from the City Council regarding an amendment to increase the citywide minimum wage to $14.25, and finally to $15 in 2020.

Flaming said that, to date, there is insufficient factual evidence to determine answers for that guidepost report.

“It’ll probably be into next year when the city has information about it,” explained Flaming.

Flaming is expected to bring to the table an understanding of the University of Washington study released in June that among other conclusions claims that in the wake of wage hikes in Seattle, many workers who earn less than $19 per hour lost their jobs.

That study has been used by groups opposed to increasing the minimum wage, and, especially in Pasadena, could be used as leverage when the City Council reviews the minimum wage ordinance in 2018 and decides whether or not to continue with the next two phases of the increase that will bring the minimum wage to $15 per hour in 2020.

The discussion Friday will be from 9 to 10 a.m. Progressive Discussion Group meetings are open to anyone wanting to attend. DuPar’s Restaurant issues separate checks to attendees, so you can have coffee, breakfast, or just thoughtful discussion of progressive issues.

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