Tuesday's LA council vote to increase the minimum wage marked a sea change for LA's employees. Despite, facing one of the hottest, and hardest, rental markets in the country, and the fact that as many as 50 percent (!) of employees make less than $15 per hour, LA workers will now have the pleasure of having one of the highest minimum wages in the country.

Well, until San Francisco raises theirs in retaliation, that is.

While the ordinance is an unquestioned victory for LA's workers, union reps, and, let's face it -- politicians -- we don't yet know how it will affect Los Angeles' economy. My guess is that some industries will tend to hire less and that more of LA workers will conform to part time schedules. These predictions are rather conservative and are intended to follow hiring trends we've been seeing for years now. Though they are tempting to believe, reports on Los Angeles' coming economic demise or future "hiring ice ages" are probably vastly overstated.

Businesses are going to want to stay in Los Angeles even at a high cost. Los Angeles offers better shipping to Asia, good access to talented workers through it's two elite universities, and access to industries, garment manufacturing for example, that are not found virtually anywhere else in the country. Regardless, while $15 does seem a bit high to pay and the fear over indexing wages to inflation maybe real (though, I must point out, the US actually had negative inflation very recently), it is not even the highest or most insurmountable potential expense facing business owners as they evaluate whether they can stay in this market -- that would be rent.

While the potential economics are still up in the air, the courthouses can expect a very different story. We know that with the acceptance of a $15 minimum wage by 2020, certain employment regulations will be the focus of intense litigation. Expect the topic of tipped employees, who face different laws from a standard employer-employee relationship, to become a hot button issue as the minimum wage changes. However, until we see the mountain of cases build, our predictions is just a bit of educated speculation.

If you are a business owner needing expertise on hiring employees the correct way, or an employee who feels they have been wronged by their employer, please do not hesitate to call us at 310-461-3766 for a free consultation.