Do business in the place with the highest minimum wage in the United States

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Josiah Citrin, owner and chef of a two-Michelin-starred Santa Monica restaurant, opened a new steakhouse a few months ago off the Sunset Strip. He's already worried about whether the restaurant can survive.

The reason, Citrin said, is unique: One city of West Hollywood requires workers to be paid at least $19.08 an hour, the highest minimum wage in the country.

“It's a big challenge,” Citrin, 55, said of the new minimum wage, which went into effect about two weeks before she opened her doors in July. “Really, it's almost impossible to operate.”

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 homeowners have written to lawmakers asking for a moratorium on further minimum wage increases; another is scheduled for July, based on inflation. And last month, several marched to a local government building with signs reading “My WeHo” and “RIP Restaurants in West Hollywood.”

Their sense of duress arises 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 (except, of course, traffic) in a matter of minutes.

And that means West Hollywood small businesses have competitors in the future with lower costs.

Beyond raising the minimum wage, the West Hollywood ordinance, which the City Council passed in 2021, requires that all full-time employees receive at least 96 hours a year of paid time off for sick leave, vacation or other needs. personal, as well as 80 hours that they can work without pay.

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

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

Chris Tilly, a professor at the University of California, Los Angeles, who studies labor markets and the public policies that shape the workplace, said research had shown that gradual, moderate increases in the minimum wage did not have a significant impact. in employment levels.

“The claim that minimum wage increases destroy jobs is overblown,” Tilly said. But “there are potential downsides,” she added. “One is that economic theory tells us that too large an increase in the minimum is bound to deter businesses from hiring.”

Over the past year, workers in several California industries saw significant wage increases due, in many cases, to union victories. Health care workers at Kaiser Permanente facilities got a contract that includes a Minimum wage of $25 an hour in the state. Fast food workers across the state will soon earn a minimum wage of $20 per hourand hotel workers have received significant pay increases throughout Southern California.

Until recently, West Hollywood followed state minimum wage increases, which have increased each year since 2017, often by a dollar at a time. But that changed with the new ordinance, 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 ordinance had done more harm to workers than They have lost hours or, in some cases, their jobs after venues have closed.

Around the time the recent wage increase went into effect, Ms. Morrill helped more than 50 local businesses, including Mr. Citrin's restaurant, write a letter to the City Council outlining their concerns. They called for a moratorium on further minimum wage increases until 2025 or until the rate aligns with the Los Angeles rate. They also called for the city to roll back the mandatory paid time off policy.

West Hollywood, which incorporated in 1984, was the first city in the country to have a City Council with a majority of openly gay members. She has promoted herself as a “leader of many critical social movements,” including, among other things, advocacy for HIV causes, affordable housing and women's rights, according to a post 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 have a latte or stroll through an art gallery. People are doing calisthenics in a park. At night, the city's vibrant bar and restaurant scene creates a buzz.

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

“Our businesses are also the backbone of supporting workers – lifting up workers with a fair wage is part of ensuring economic justice and a better future for all,” said Ms. Shyne, who supports the wage ordinance minimum but said he was seriously listening to the resistance. of the business community.

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 said, has also directed staff members to get feedback from workers about the effect of paid time off.

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

Kurt Petersen, co-president of the venue, said West Hollywood was setting a standard that should be replicated in California and the country. “It has raised the standard of living and given workers the security of paid time off,” he said.

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

In an interview, Leonard said he wasn't worried about the minimum wage because he paid his hairdressers at least $23 an hour.

“Everything is going up, and so should salaries,” he said.

Steve Lococo, who has been part of the business community for decades, said small business owners “have not been heard at all” over the past two years in West Hollywood. He has raised prices (an average haircut, previously $150, now costs $195) and his business, B2V Salon, which he co-owns with Alberto Borrelli, has reduced its employees from nine to five. At the beginning of the new year, Lococo said, the salon will reassess staffing.

“There need to be modifications to this ordinance,” he said. “Lately, it's like, as a business owner, you feel like you don't have a say in how things are done in the city.”

Meanwhile, 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 prime cuts of meat, had been reduced by around 50 to 35.

At high-end restaurants like his, 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 what his Los Angeles and Santa Monica restaurants generate, but his overall costs are higher in West Hollywood. For now, he said, he's not sure about his future in the city.

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

“That's something I need to answer in the coming months,” he said.



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