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New York City, LA among cities moving to raise minimum wage

Matt Flegenheimer of the New York Times joins Hari Sreenivasan to talk about the U.S. cities moving to raise minimum wage on the local level, as the issue lingers in Congress.

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  • HARI SREENIVASAN:

    Some of America's biggest and most expensive cities are acting on their own to increase the minimum wage. For some insight yesterday I spoke to Matt Flegenheimer, a reporter with the New York Times.

    New York did something recently, so did L.A., what did they do?

  • MATT FLEGENHEIMER:

    So, in New York at least on Tuesday, Mayor DeBlasio signed an executive order essentially expanding a law that was passed in 2012 – over the objections of Mayor Bloomberg – which stipulated that on city subsidized projects, workers were entitled to a what's called a 'living wage'.

    At this point it would be $13.13 as the minimum. Sort of a wide expansion compared to what we saw a couple of years ago.

    Any tenants or subtenants on projects that receive city subsidies now are entitled to that wage, it is about 18,000 workers by the administration's estimate.

  • HARI SREENIVASAN:

    OK and this is if it goes through and makes it through city council, right?

  • MATT FLEGENHEIMER:

    No, this is an executive order, which is sort of a sticking point. Some of the council members have kind of chafed at being bypassed in this case. They probably would have supported it. It has been a very sort of compliant council here in New York. But the mayor did this on his own.

  • HARI SREENIVASAN:

    And Eric Garcetti in Los Angeles trying a little something different.

  • MATT FLEGENHEIMER:

    A little bit different. So, there are a couple of things going on there. The sort of broader minimum wage package he is pushing for I believe $13.25 and then for hotel workers – in a lot of cases – they have gone for sort of an expansive move through the council as well, which has been faced with some opposition obviously from some of the business groups who have said that this could cost jobs in the long run potentially if workers don't want to, rather, if employers don't want to pay these wages to workers, they'll take their jobs elsewhere, so there's been a bit of a debate there over that.

  • HARI SREENIVASAN:

    Well, most people people don't recognize that Los Angeles has a huge manufacturing – food processing, fashion and apparel – industry there. This particular minimum wage increase, if it went through, that would affect a half a million people.

  • MATT FLEGENHEIMER:

    Absolutely, and there is also the factor of L.A. being I believe the biggest sort of income disparity among the large cities in America. I think 28 percent below the poverty line. So that's a factor as well in terms of potentially costing jobs, even if they are higher paying jobs.

  • HARI SREENIVASAN:

    So what about those businesses? Are they planning to push back? Or, are they planning to move to other towns because that is usually one of the economic resistance to increased minimum wage is that they'll say that this will stifle job creation.

  • MATT FLEGENHEIMER:

    That's sort of the Doomsday prediction from groups over there. The L.A. Chamber of Commerce has said there is this fear, particularly in L.A., where you have a lot of surrounding cities that you can essentially move across the street and charge a different wage than you might have had to if you were staying in Los Angeles.

  • HARI SREENIVASAN:

    And there are other cities around the country, Seattle got a lot of press for pushing it up to $15. But, that's also a city that is not nearly as impoverished as Los Angeles, the income disparity is not as, I think the aviation is kind of the central hub there and they might actually make more than 15 bucks to start with, right?

  • MATT FLEGENHEIMER:

    Yeah, that's seen as one of the leading cities on this one, but then again is under a different set of circumstances there as far as the income situation.

  • HARI SREENIVASAN:

    How does this play out when you look at the overall map? Are these cities and what they are doing, is that having a ripple effect in other townships just to try to stay competitive, or perhaps take advantages if these things are uncompetitive for businesses?

  • MATT FLEGENHEIMER:

    It's hard to say, it seems sort of early in this kind of city level movement. I spoke with the Labor Secretary, Tom Perez earlier in the week and he said essentially on the federal level you've seen such little movement on this – President Obama obviously came out in favor of a $10.10 minimum wage – but there hasn't been any momentum on that in Congress. That it really has to happen at a more local level.

    And you see New York as sort of the last iteration of that–L.A., Seattle, Chicago, being others. But even in New York City, the minimum wage is set at the state level, so that is sort of a looming fight as well between city government here and state lawmakers in Albany.

  • HARI SREENIVASAN:

    Matt Flegenheimer with the New York Times, thanks so much.

  • MATT FLEGENHEIMER:

    Thank you.

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