Of course this will eliminate poverty wages because it’s designed to kill businesses, therefore there will technically be no poverty wages. Even college finance students know wage hikes have to be covered somehow otherwise the business is liquidated.
The city of Los Angeles ruled to hike the minimum wages by 30% in less than 5 years, a move rendering local businesses less competitive and sustainable, while benefitting unions, illegal aliens and governmental bureaucrats.
Kristian Rouz – On Saturday, the mayor of Los Angeles Eric Garcetti enacted the law, authorizing an increase in the city’s minimum wage from the current $9/hr to $15/hr by the year 2020.
In a long-term perspective, such a move has potentially hazardous consequences, possibly undermining the economic competitiveness of LA-based enterprises, and disrupting business activity in the city.
Mayor Garcetti signed the legislation into a law after its final approval by the Los Angeles City Council, which voted 14-1 in favor of the minimum wage hike. The new law will affect some 600,000 of the lowest-paid working class. While the poor welcomed Mayor Gracetti’s speech introducing of the new law delivered in both English and Spanish, LA’s entrepreneurs are preparing for a coming slump in profitability.
The initiative is aimed at reducing the overwhelming poverty, plaguing Los Angeles for decades. However, such a significant rise in minimum wage – by nearly 30% in a matter of five years – is a bad sign for the city’s employers, who are likely to either move their operations out of Los Angeles or lay off personnel rather than accepting higher expenses.
The first pay hike will occur in July 2016 and will see the wage rising to $10.50/hr.
According to Moody’s estimates, as increase of the minimum wage just to $10.10 will shrink operating margins by 2.3%, down to 9.7% from the current 12% in service companies with no more than 20% of staff affected by the hike. A hike to $15/hr, already implemented in Seattle, will trigger a doubly large decline in profitability, Moody’s said.
Full article: Los Angeles’ $15/Hr Minimum Wage Hike to Ruin Southern California’s Economy (Sputnik News)