$13.25 for small businesses, $14.25 for large businesses.
By Kai McNamee
For the third year in a row, parts of Los Angeles County — including Santa Monica and the City of Los Angeles — have seen an increase in minimum wage. The wage increase comes with concerns over wage enforcement and climbing costs of living.
As of July 1, 2019, small businesses of 25 or fewer employees must pay a minimum wage of $13.25. Large businesses of 26 or more employees must pay a minimum wage of $14.25. As outlined by the Santa Monica Minimum Wage Ordinance, the minimum wage has increased yearly since 2016; by 2020 and 2021, large and small businesses will be required to pay employees a minimum of $15 per hour, respectively. Starting July 1, 2022, the minimum wage will be adjusted annually according to the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W), an index used to monitor cost of living published by the Bureau of Labor and Statistics.
In Santa Monica, many are worried about the rising costs of living — some question whether or not the minimum wage will be enough to compensate for the cost of living in the city. Simone Acciai, the owner of Dolcenero Gelato on Main Street, is concerned that even a $15 minimum wage is not enough to live in Santa Monica. After raising the minimum wage for his employees to $13.25, Acciai says it’s “still not enough” to afford the cost of living in Santa Monica. “I’m happy for my employees, but two to three dollars per hour more is not even close to enough.”
But others are more optimistic. Jay, a manager at Mohawk WEST on Main Street says the increase is good for workers. “I think it’s good for employment because the cost of living is going up.” Jay is uncertain what the impact will be on the region’s economy, but he believes prices and wages will eventually balance out.
In 2022, the Minimum Wage Ordinance will be the first piece of legislation to index Santa Monica’s minimum wage. Similarly, wage ordinances adopted by LA City and unincorporated parts of LA County will also use the CPI-W to adjust minimum wage on a yearly basis, starting in 2022. CPI-W is a measure of the average change in prices of a fixed basket of goods and services consumed by average urban wage earners and clerical workers. According to the Bureau of Labor and Statistics, 29 percent of Los Angeles’ total population falls under CPI-W.
Prior to the 2016 Minimum Wage Ordinance, Santa Monica followed California’s minimum wage laws. BLS statistics show that CPI-W has increased roughly 43 percent between 2000 and 2015, calculated using 1982-1984 as the base period; Santa Monica minimum wage grew roughly 56 percent between 2000 and 2015. Prices, as measured by the CPI-W, have increased, but minimum wage has also followed upward trends.
Santa Monica’s minimum wage law is enforced by the Los Angeles County Department of Consumer and Business Affairs (DCBA). Since contracting the DCBA to enforce minimum wage laws in 2016, Santa Monica has prosecuted two hotel gift shops, the Loews Hotel in Santa Monica, and a janitorial company.
