Minimum wage in West Hollywood, the highest in the United States, irritates traders

Josiah Citrin, owner and chef of a Santa Monica restaurant with two Michelin stars, opened a new steakhouse on the Sunset Strip a few months ago. He’s already worried about the restaurant’s survival.

The reason, Mr. Citrin said, is singular: A city in West Hollywood requires that workers receive at least $19.08 an hour, the highest minimum wage in the country.

“It’s a real challenge,” Mr. Citrin, 55, said of the new minimum wage, which took effect about two weeks before it opened in July. “In reality, it’s almost impossible to make work.”

His sentiment is widely shared among business owners in West Hollywood, a city of 35,000 known for its restaurants, boutiques and progressive politics. In recent weeks, many landlords have written to legislate, pleading for a moratorium on further increases in the minimum wage; another one is planned for July, based on inflation. And last month, several people marched to a local government building with signs reading “My WeHo” and “RIP Restaurants in West Hollywood.”

Their sense of sustainability stems in part from geography. The irregularly shaped city is bordered by Beverly Hills to the west and Los Angeles to the north, south and east. Some streets start in Los Angeles, run through West Hollywood, and end in Beverly Hills. You can be in three cities – excluding traffic of course – in a matter of minutes.

This means that small businesses in West Hollywood have closer competitors with lower costs.

Beyond the minimum wage increase, West Hollywood’s ordinance, which the City Council approved in 2021, requires all full-time employees to receive at least 96 hours per year of paid vacation time. illness, vacation or other personal needs, as well as 80 hours they can take without pay.

The California state minimum hourly wage is $15.50, the third highest in the country, trailing only the District of Columbia at $17 and Washington State at $15.74. But just as each state’s minimum wage can exceed the federal minimum of $7.25 an hour, more than two dozen California cities, including West Hollywood and several in the Bay Area, have minimum wages higher than those of the state, according to the Economic Policy Institute. a non-partisan think tank.

In San Francisco, it’s $18.07; in Los Angeles, $16.78.

Chris Tilly, a professor at the University of California, Los Angeles, who studies labor markets and public policies that shape the workplace, said research has shown that gradual, moderate increases in the minimum wage have no impact. no significant impact on employment levels.

“The claim that minimum wage increases are job destroyers is overblown,” Tilly said. But “there are possible downsides,” he added. “The first is that economic theory tells us that raising the minimum wage too much is likely to dissuade businesses from hiring.”

Over the past year, workers in several California industries have enjoyed significant wage increases, driven, in many cases, by union victories. Healthcare workers at Kaiser Permanente facilities were awarded a contract that includes a $25 an hour minimum wage in the state. Fast food workers statewide will soon earn a minimum wage of $20 an hour, and hotel workers received significant pay raises in Southern California.

Until recently, West Hollywood tracked increases in the state’s minimum wage, which has increased every year since 2017, often by a dollar at a time. But that changed with the new order, which included a series of increases.

Genevieve Morrill, president of the West Hollywood Chamber of Commerce, said that while her group wanted workers to earn a living wage in an increasingly expensive part of the country, she felt the order had done more harm to workers, who have lost hours or hours. , in certain cases, their employment after the closure of the premises.

As the recent wage increase took effect, Ms. Morrill helped more than 50 local businesses, including Mr. Citrin’s restaurant, write a letter to the city council expressing their concerns. They called for a moratorium on further increases in the minimum wage until 2025 or until the rate aligns with Los Angeles’s. They also demanded that the city roll back the mandatory paid leave policy.

West Hollywood, incorporated in 1984, was the first city in the country to have a city council with a majority of openly gay members. She identified herself as “a leader in many critical social movements,” including, among others, advocacy for HIV, affordable housing and women’s rights, according to an article on the city’s website .

When you walk down Santa Monica Boulevard, which runs through the center of this city, a bustling energy fills the sidewalks. Several residents catch up on phone calls while walking their dogs, and others grab a latte or stroll through an art gallery. People are doing gymnastics in a park. At night, the city’s lively bar and restaurant scene creates a buzz.

Mayor Sepi Shyne, who was sworn in this year, said businesses have long been part of the social fabric of the community.

“Our businesses are also the backbone of worker support: Providing workers with a fair wage is part of ensuring economic justice and a better future for all,” said Ms. Shyne, who supports the ordinance on minimum wage but said she was seriously listening to the resistance. of the business world.

Last month, the City Council, of which Ms. Shyne is a member, approved about $2.8 million in waivers, credits and marketing dollars to help the business community. The city council, she explained, also asked staff members to gather feedback from workers on the effect of paid leave.

One of the main supporters of the ordinance was UNITE HERE Local 11, which represents 30,000 hotel and restaurant workers in Southern California.

Kurt Petersen, co-president of the local chapter, said West Hollywood sets a standard that should be replicated throughout California and across the country. “This has improved living standards and given workers the security of paid leave,” he said.

Near the intersection of Santa Monica and La Cienega boulevards, Paul Leonard plans to open a location for his pet grooming business, Collar & Comb. It has operated in other locations, just blocks away in Los Angeles, since 2019. The most popular service, Mr. Leonard said, is full-spectrum specialty grooming for dogs under 20 pounds at $166 .

In an interview, Mr. Leonard said he was not concerned about the minimum wage because he paid his groomers at least $23 an hour.

“Everything is increasing, salaries too,” he said.

Steve Lococo, who has been in the business world for decades, said small business owners “haven’t been heard at all” over the past two years in West Hollywood. He raised prices – an average haircut, previously $150, is now $195 – and his business, B2V Salon, which he co-owns with Alberto Borrelli, cut its employees from nine to five. Early in the new year, Mr. Lococo said, the salon will evaluate its staff again.

“Changes need to be made to this ordinance,” he said. “Lately, it feels like as a business owner you don’t have a say in how things are done in the city. »

Meanwhile, Mr. Citrin, who has run restaurants in the Los Angeles area for more than 25 years, said the staff at his West Hollywood restaurant, Charcoal Sunset, which specializes in premium cuts of meat, was went from around 50 to 35 people.

At high-end restaurants like his, Mr. Citrin noted, servers often make a lot of money — sometimes more than $50 an hour when tips are included, he said. Most nights, his West Hollywood restaurant generates revenue comparable to his restaurants in Los Angeles and Santa Monica, but his overhead costs are higher in West Hollywood. For now, he said, he’s unsure of his future in the city.

He often wonders if it’s easier to just focus on his restaurants elsewhere in the area.

“That’s a question I have to answer in the coming months,” he said.