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Mayor Garcetti Calls For Minimum Wage Hike To $13.25 Per Hour

LOS ANGELES ( — Mayor Eric Garcetti Monday called for the city of Los Angeles to raise the minimum wage up to $13.25 per hour.

Garcetti announced his "Raise The Wage LA" plan during a Labor Day rally at Martin Luther King Jr. Park in South Los Angeles.

"Today, I am proud that we are launching the largest anti-poverty program in this city's history," Garcetti said. "If you work hard, you shouldn't be in poverty."

Under Garcetti's plan, minimum wage in the city of LA would increase $1.25 in the first year and $1.50 in each of the following two years before topping out at $13.25 by 2017, officials said. The current minimum hourly wage in California is $9 and is set to increase to $10 in 2016.

Any future increases would be tied to the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W) to ensure wages are not eroded by inflation, Garcetti said.

"The minimum wage shouldn't be a poverty wage," Garcetti said in a statement. "Angelenos working full time should be able to afford to live in our amazing city."

A study of Garcetti's proposal (PDF) by leading U.C. Berkeley economists and researchers Michael Reich, Ken Jacobs, Annette Bernhardt, and Ian Perry stated, "Most businesses would be able to absorb the increased costs, and consumers would see a small one-time increase in restaurant prices."

The report also predicted the policy's impact on overall employment "is not likely to be significant," according to Garcetti's office.

KNX 1070's Jan Stevens reports some economists such as Dr. Dale Belman, Michigan State University professor of Human Resources and Labor Relations, have downplayed the proposal's effect on job creation.

Mayor Garcetti Issues Call To Raise Minimum Wage To $13.25 Per Hour

"If you went out and doubled the minimum wage, you'd have a disemployment effect, but that's not what we're talking about," Belman said. "The wage increases you're looking at over three years are moderate."

In response to Garcetti's proposal, The California Hotel & Lodging Association issued a statement that read in part: "For some time now, labor leaders have been circulating a way to raise the minimum wage to more than $15 an hour, 60% above the current California minimum wage, but only for one segment of the City's work force, hotel workers.

"Now, Mayor Garcetti has a separate proposal that will require all employers within city boundaries to pay a higher minimum wage. But the proposal to unfairly target hotels is still on the table on top of the recently increased federal and state wages. If both proposals pass, the City will have contrary wages for different industries. This is very troubling and we look forward to talking more with our elected officials to express our concerns."

Los Angeles is among cities like New York, Chicago, San Francisco and Oakland where minimum wage increases are being considered, according to the National Employment Law Project.

The anticipated $13.25 proposal would still be less than the $15 minimum hourly wage that is on the November ballot in San Francisco.

Seattle recently approved minimum wage increase to $15 by 2017, and San Diego also approved a rise to $11.50 an hour by 2017.

Garcetti made his announcement Monday as President Barack Obama took his campaign to hike the national minimum wage to a union crown in Milwaukee.

A number of local small business owners, meanwhile, expressed concern over the plan to increase the minimum wage, saying the increase in labor cost may mean the death of many small businesses.

"If it's a ten percent increase, fifteen percent increase, that's big," small business owner Peter Jarjour. "But you're talking about a forty to fifty percent increases; that's big, big, big money."

Jarjour predicts that no small number of small businesses in Los Angeles will have to close their doors as a result of the increases.

The "ripple effect" is also a concern, as worries increase over the minimum wage surpassing what some higher-end employees already make, making it necessary to increase their wages as well.

"So they're going to figure, 'I was making thirty percent more than this guy, now I want to make thirty percent more than he does', and he's making thirteen (dollars per hour), so you're going to have to give him a raise, too," Jarjour said.

RELATED STORY: California Minimum Wage Rises To $9 Per Hour

(©2014 CBS Local Media, a division of CBS Radio Inc. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed. Wire services contributed to this report.)

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