Raise the minimum wage to $15 an hour? What it could mean for Echo Park businesses and workers

Mar 5, 2014

By Hayley Fox

Echo Park coffee house worker | Lucy Guanua

Some civic and big business leaders are talking about raising the minimum wage for all workers across the city, with some proposing hiking the hourly minimum to $15 an hour — nearly double California’s current minimum. If city leaders eventually decide to hike the minimum wage, it could mean major changes for the way many small businesses in Echo Park and elsewhere operate. Many neighborhood business owners, who are often working on shoestring budgets, rely on minimum wage workers to keep their businesses afloat. These employees are pouring you beers, serving you lunch and cooking your dinner.

Serena Herrick is a bartender at Allumette in Echo Park. She’s been working there for a little more than a year and has been in the service industry since she was 15. Herrick said a higher minimum wage could cause customers to tip less, but may make for more productive businesses. “Generally speaking fairly paid employees do better work,” she wrote in an email. “Feeling adequately appreciated via compensation makes a better work environment overall…”

And although bartenders and servers make most of their money from tips, not a paycheck , Herrick said a minimum wage hike would be especially helpful for those in the back of the house. Employees who work long hours in the kitchen and must live solely off a minimum wage check.

The L.A. City Council is currently considering a minimum wage of $15.37 an hour for hotel workers at more than 80 hotels within the city. But now billionaire Eli Broad said he favors gradually raising the minimum hourly wage to $15 for all workers across the city while Councilman Gil Cedillo, who represents a portion of Echo Park, favors a “more comprehensive approach” according to the L.A. Times. “I want to talk about the entire city, not just one industry,” he told the Times.

But while $15 an hour would be a welcome change for employees, it could be the downfall of some local businesses. As operation costs increase, owners will offset the money elsewhere in their budget. For restaurants, this could mean a reduction in food quality or a surge in menu prices. For other businesses, this could mean scaling back in staff.

Liz Garo owns Echo Park’s Stories Books and Cafe on Sunset Boulevard. She said if the minimum wage was $15, they could cut employee hours and the owners would work more themselves. They may also have to lay-off a portion of their employees entirely, and increase prices in the shop and café.

Garo said small businesses don’t have much room for “frivolousness”, so they’re extremely conscious of every nickel and dime spent. Rent and employees are the biggest costs for a small business, she said, so a dramatic increase in one could dramatically alter operations.

Garo said a higher minimum wage could lead not only to a smaller staff, but a less eclectic one. For $15 an hour, she said she’d be likely to hire more “corporate,” buttoned-up personnel and would lose the “cool kookiness” that makes up the charm of Stories – and many other small businesses in the area.

Hayley Fox is an L.A. native now living in Echo Park. After getting her master’s in journalism at the Annenberg school, Fox worked at public radio station KPCC 89.3 where she wrote and produced stories for online and on air. She covered mostly downtown L.A. and South L.A. news, as well as covering city-wide crime, breaking news and the occasional adorable animal story.

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