Mayor Eric Garcetti announces minimum wage proposal for Los Angeles (updated)

Following in the footsteps of cities like Seattle and San Francisco, Mayor Eric Garcetti made a Labor Day pitch for an increase, over the next three years, in the Los Angeles minimum wage to more than $13 per hour.

The mayor made the announcement in a South L.A. park at what's billed as a "rally to address poverty in Los Angeles."  His proposal would increase the city's minimum wage to $13.25 an hour by 2017 and then tie the wage to the Consumer Price Index for urban wage earners. 

Garcetti said the new wage would "restore dignity for all Angelenos," according to NBC4.

California's minimum wage is currently $9 per hour and will increase to $10 on Jan. 1, 2016.

"From the president to local leaders in other cities, we've seen Republicans and Democrats alike say our minimum wage simply is too low, that people cannot support themselves. And I'll tell you what, the cost to me and to everybody listening to this, to people who work full time but can't afford to feed their families or get health care, that means we pick up the tab," Garcetti told KNX 1070 on Thursday. 

"Our recession is lagging because we don't have buying power at the bottom end of the economic scale. That means poor people have no money to spend in our shops and everything else is suffering," Garcetti said. 

The minimum wage proposal is supported by the L.A. County Federation of Labor, though organizers in the labor community have long said they want to see hourly wages set at $15. 

"Raising the minimum wage will help directly approximately 800,000 people who work within the boundaries of the city of Los Angeles," said Maria Elena Durazo of the county Federation of Labor. 

"Those working men and women when they get an increase in their wages, they are ready to spend it. It will go into the dry cleaners, the local restaurants, it will go toward getting their own apartment so two families don't have to pay rent in a single apartment," Durazo said. "They will spend this money because they live on the fringe and edge of so much poverty." 

Members of the business community are already speaking out about the proposal. 

"We're concerned that a 50 percent increase will force a lot of businesses to either raise prices, which hurts everybody, or to cut jobs, which hurts those people who lose their jobs," said Stuart Waldman, president of the Valley Industry and Commerce Association. 

The president and CEO of the LA Area Chamber of Commerce said he's particularly concerned about the impact to small businesses and nonprofits. 

"What impact will that have on their operations and their ability to maintain the number of employees they have right now?" said Gary Toebben. 

"Our polling so far shows about 85 percent of the business people (who belong to the Chamber) think that the proposal that they have seen is not in the best interest of the city," Toebben said.

The proposal comes as the Los Angeles City Council is considering raising the wages of non-unionized hotel workers to $15.37 per hour. Hotels near LAX that do not provide health care are already required to pay their employees a similar wage. Hotel operators that do offer health insurance must pay workers about $11 per hour. 

The proposal follows similar actions in other major cities. Seattle will see its minimum wage increase beginning next April. Over three to seven years, the hourly wage there will reach $15. San Francisco voters will be asked in November whether the city should increase wages to $15 per hour by 2018. 

This story has been updated.