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Dan Gilmore / May 20, 2015

Los Angeles Starts Its Minimum Wage Experiment

Los Angeles bought the ticket. In a 14-1 vote, its city council elected to raise the city’s minimum wage from $9 to $15 over the next few years. Now, it’s going to take the ride. The decision has a massive impact on the City of Flowers and Sunshine, as 50% of its workers currently make less than the new minimum. The council’s decision is more decision than Seattle’s decision to raise its minimum wage to $15-a-hour last year. Los Angeles is the second largest city in the nation, and while Seattle raised its minimum wage from $9.32 to $15, Los Angeles started from $9. Now, the question is what will be the cost on the city, paid out in shuttered businesses, unemployed workers and a chilled economy. Reason’s Peter Suderman writes that this experiment will help figure out just how much the minimum wage could be raised to create a benefit for workers, and how much it can be raised before the economy is hurt. Truth is, we’re in uncharted territory. The New York Times wrote, “Even economists who support increasing the minimum wage say there is not enough historical data to predict the effect of a $15 minimum wage, an unprecedented increase. A wage increase to $12 an hour over the next few years would achieve about the same purchasing power as the minimum wage in the late 1960s, the most recent peak.” We’ll see soon enough. However, liberals assume raising the minimum wage presents no economic harm and they continue to push for a policy that may hurt the very people they say they want to help.

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