Opinion | Pasadena’s Minimum Wage: Devil in the Details

On Monday, February 1, the Pasadena City Council will make a long anticipated decision about adopting a citywide minimum wage. Mayor Terry Tornek and most council members have declared their support for a $15/hour minimum wage. But the details of the actual ordinance are still up for debate. How they address those details makes a big difference in how many employees get covered and whether the law helps lift them out of poverty. In particular, the mayor and Council must decide about the timing of the increases, future cost of living increases, monitoring its impact, and enforcing its provisions. A few simple guidelines will ensure an effective ordinance.

Foremost, the minimum wage needs to be uniform across the Los Angeles region. Both employers and employees are more likely to know what the law requires if it is the same in all Los Angeles cities. A uniform wage will make it easy for employers to comply with the law, reduce the cost of enforcement, and limit the amount of wage theft that is currently a serious problem. .

Second, the mayor and council should adopt a minimum wage law that doesn’t require repeated legislative action. The City Council always has the ability to rescind any part of the ordinance, but it should not be required to revisit minimum wage levels. Both Los Angeles City and Los Angeles County—applicable in unincorporated areas such as Altadena—have passed plans for yearly minimum wage increases, culminating in $15/hour for all employees by 2021. After that date, the minimum wage would increase based on the local inflation rate, using a formula that is already used for Social Security and other programs.

Unfortunately, some Pasadena officials appear to support an ordinance that might deviate from what already been implemented in the surrounding Los Angeles City and unincorporated parts of Los Angeles County, including Altadena. For example, a January 2016 City staff report recommends that Pasadena would re-vote on the minimum wage in 2018. That has the potential to make the Pasadena minimum wage way out of step with the City and County schedule, creating a compliance nightmare. For example, employers with multiple establishments in Pasadena, Los Angeles, and Altadena would have different rates apply and employees would face a more difficult task to know their rights.

In addition, some City officials have proposed a cap to the cost of living adjustment to begin in 2022. If implemented, this plan also would put Pasadena out of step with other nearby cities. The difference between Pasadena and the Los Angeles minimum wage might only be pennies if, for example, inflation was just 1% over the cap. It makes no sense for LA to have a $15 minimum wage 2020, while Pasadena’s is, say, $14.78. This would simply make compliance and enforcement much more difficult.

Even with a regional, widely-understood minimum wage, there will be some rogue employers who try to evade paying the legal wage. Employers who obey the law should not have to compete with businesses that violate the law. Responsible employers and employees alike will benefit from strong enforcement. It makes sense for Pasadena to collaborate with other cities –perhaps through an LA County agency– to educate the public and investigate local minimum wage law violations. But Pasadena, like other cities, also needs some local staff to enforce the law. That would require a small office, working with County staff, to which Pasadena employees could bring complaints, assured of support from Pasadena law enforcement and local community groups. In addition, the local law should be crafted to allow private attorneys to represent workers to make sure that they are getting the wages they are due. To deter them from violations, employers should be liable for triple damages if a court finds that they have broken the law; in those cases, attorneys should be able to collect fees.

A year ago, the Pasadena Chamber of Commerce and some local officials argued that Pasadena not go it alone, but be part of a regional approach. But now the Chamber and some of their political allies are making the misleading argument that Pasadena is too different from Los Angeles, Los Angeles County, Santa Monica, and other areas that have adopted similar minimum wage laws.

Even with more than 100,000 people who work in the city, Pasadena is small compared with the millions working in the surrounding areas. Some Pasadena residents who work in Los Angeles and Altadena are already benefitting from the higher wage on those areas. Some people who work in Pasadena live in the surrounding communities. That is precisely why Pasadena would be best served by following the City and County approach. That means adopting a policy to gradually raise the minimum wage to $15/hour over five years, then adjusting it annually based on the Consumer Price Index.

 

Mark Maier is a Pasadena resident and professor of economics at Glendale Community College.

Al Bevans is a Pasadena resident and a political campaign coordinator.