Minimum wage hike affects Los Angeles apparel industry

Earlier this month, the Los Angeles City Council voted and approved of a 15 dollar minimum wage for workers in the greater Los Angeles area. For many industries, the wage-hike can prove to be beneficial or detrimental for the labor force. As the minimum wage will not take effect completely until 2020, the ramifications for this action are already being considered by the fashion and apparel industry.

Retailers all over California are known for paying minimum wage as entry-level jobs for their stores. Although Los Angeles is a city known for its numerous jobs in the fashion industry, this makes it no exception. Boutiques that pay their employees over the minimum wage current limit, which is 9 dollars, will not be as largely affected.

According to Slate, employees may prefer to keep their lower wages in order to maintain their jobs. “[Some] local industries in Los Angeles, such as apparel manufacturing, [may believe] 15 dollar per hour is too high a minimum, and workers might prefer to accept lower pay in order to keep their jobs,” according to Slate. The results of the minimum wage raise may ultimately end up in less opportunities for Los Angeles locals. If retailers are not able to pay their employees the higher wage within the 5-year plan, it may result in cuts for retail staff ultimately causing a drop in employment opportunities.

Minimum wage increase could hurt businesses

Shops that manufacture and use resources based in Los Angeles are also more likely to be directly affected from the wage jump. “[It’s] a big negative for retailers,” Esmael Adibi, Ph.D., director of the A. Gary Center for Economic Research at Chapman University told WWD. Adibi states that retailers won’t be able to pass along all the costs to consumers. Ultimately this will result in profit margin loses and consumers will also pay more. Companies who based their manufacturing in the area may also have to reconsider their options. “For those producing goods in L.A., they may move out of the area,” Adibi told the publication.

Overall, the retail and apparel industry in Los Angeles may slightly suffer from the minimum wage hike. Los Angeles businesses owners may face a setback with the labor wage approval. The landmark legislation approval follows the lead of other major cities in California such as San Francisco and Oakland. The plan set in motion is set to raise the wage slightly every year to eventually reach 15 dollars by 2020. Employers that have 26 or more workers will have an additional year to reach the wage goal.