Pasadena Hiring 2 Consultants to Study Effect of Minimum Wage Increase

Published : Friday, September 14, 2018 | 4:49 AM

UCLA Professor Edward E. Leamer (left) and UC Berkeley Professor Michael Reich

The City is moving forward with the hiring of two expert consultants to report to the City Council on the effects of Pasadena’s 2016 decision to raise the minimum wage to $15-per-hour by 2020.

An independent report on the impact of the wage increase on the local economy is required under the ordinance that laid out the process for gradually increasing the minimum wage, according to Pasadena Economic Development Manager Eric Duyshart.

“This report will review changes to Pasadena’s unemployment, poverty, [and] the overall Pasadena business climate,” he said.

In an effort to obtain a fuller picture of the complex issue, the City has elected to double up on economists, Pasadena Economic Development Project Manager Ruth Martinez said.

“It helps to ensure that we’ve got more than one kind of perspective on the question,” Duyshart said.

Through a “request for proposal” process, UCLA Professor Edward E. Leamer and UC Berkeley Professor Michael Reich have been selected, Martinez said.

Leamer is Chauncey J. Medberry Chair in Management / Professor in Economics & Statistics and Director of UCLA’s Anderson Forecast center.

Reich is Professor of Economics and Chair of the Center on Wage and Employment Dynamics at the Institute for Research on Labor and Employment of the University of California at Berkeley

The study will include a survey posted on the City’s website, but it will primarily focus on hard data, Duyshart said. “It’s not anecdotal. It’s really just the formal data from the state that is going to be relied on the most.”

The state has since passed its own law raising the minimum wage to $15-per-hour by 2022. Duyshart said even if Pasadena’s ordinance were reversed, it would only result in a two-year delay of the same minimum wage.

That’s exactly what Pasadena Chamber of Commerce President and CEO Paul Little said he wants to see happen.

“Our preference would be to have the City align with what the state’s doing for lots of reasons. Slower ramp up is less immediate impacts,” he said. “Our folks who have businesses in multiple jurisdictions will be dealing with one set of regulations.”

He advocated against the increase in the first place, but also urged the inclusion of the mid-point review. But he said with a countless array of factors to consider, ranging from the larger economy to employment data and market pressures, the consultants face a challenging task in trying to ascertain the effect of the minimum wage increase.

Pasadena resident and Glendale Community College Economics Professor Mark Maier also provided input when the City was drafting its “Request for Proposal” for the study.

He said Pasadena should keep on track with its minimum wage ordinance’s plan for steady annual pay increases.

Los Angeles and unincorporated Los Angeles County areas — like neighboring Altadena — also have ordinances in place to boost the minimum wage to $15 per hour by 2020, Maier said. Pasadena should remain shoulder-to-shoulder with its neighbors, rather than slow the wage increases to the state level, he said.

“If it’s different if you cross over to Los Angeles and cross over into Altadena, it’s a nightmare for businesses [that] have multiple operations,” Maier said. “And workers can’t possibly keep track if they move from an Altadena location to a Pasadena location… That makes no sense at all.”

But Maier agreed with Little that the consultants have their work cut out for them.

“We’re trying to do an extremely difficult economic project, which is trying to fathom what the effect of one policy change has been on an economy that’s incredibly complex,” according to Maier.

And since people often live and work in different places, isolating the effect of the wage is “almost impossible,” he added.

Duyshart said the reports are scheduled to be filed toward the end of the year.

The Minimum Wage Survey can be found at (https://ww5.cityofpasadena.net/planning/code-compliance/minimum-wage-ordinance/)

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