CITY HALL - Los Angeles City Councilmembers Mitch O’Farrell and Bob Blumenfield introduced a motion today that directs staff to procure an economic analysis on the unintended consequences of increasing the minimum wage, especially as it relates to small business and nonprofit sectors.

The motion directs the City Administrative Officer and the Chief Legislative Analyst to evaluate the pros and cons of categorical exemptions, alternative methods for measuring and implementing automatic wage increases, and establishing a base and ceiling for the increase.

"I support the efforts of my colleagues to increase the minimum wage, however the conversation about imposing an increase needs to be elevated and expanded,” said O’Farrell.  “It is critical we do everything we can to help lift people out of poverty. It is equally critical we do so in a thoughtful and balanced way. I am a strong supporter of our business community, especially our small business owners. Many of them already exist at the margins, and it is our obligation to explore every consequence, because there's too much at stake in our economy."

According to the Small Business Administration, there are 249,000 small businesses in Los Angeles County. It is widely known that small businesses make up a majority of jobs in the City of Los Angeles.

"As we work to lift Angelenos out of poverty, it is crucial that we be deliberative and get it right--particularly because of the impacts that will be felt by small businesses and non-profit providers who drive our economy and serve our most vulnerable,” said Blumenfield, who is a member of the City’s Budget and Finance Committee.

O’Farrell recently distributed a small business survey to receive feedback from owners on a minimum wage increase. He also met with a group of small business owners in the 13th District, who reported that rising overhead costs combined with a minimum wage increase could force many to close their doors.

The state raised the minimum wage to $9 in July, and will raise it again to $10 in January 2016. O’Farrell wants the City of Los Angeles to remain competitive with neighboring cities in Los Angeles county who have not increased the minimum wage in their municipalities.

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