LA City Council committee to consider exemptions to new minimum wage for some nonprofits

As the Los Angeles City Council developed its plan to raise the minimum wage to $15 per hour by 2020, members heard regularly from three nonprofits about why they deserved an exemption.

The nonprofits, Homeboy Industries, the L.A. Conservation Corps and Chrysalis, all work with people who have a tough time finding work: former gang members and prison inmates, at-risk youth, and the chronically homeless. A key component of their programs is employment: a job created by the nonprofit to train the so-called "transitional worker" not just in new skills, but in the rhythms and rigors of employment.

Since these transitional jobs are minimum wage jobs, the nonprofits say they would create far fewer of them if they had to pay a higher minimum wage. That is why they believe their type of nonprofit should be granted an exemption from the wage hike. They'll make that case again on Tuesday, when the City Council's Economic Development Committee is expected to consider such an exemption. 

Mark Loranger, president of Chrysalis, says his nonprofit helped 1600 poor or formerly homeless people find jobs last year. Chrysalis provides street-cleaning and maintenance services, and hires transitional employees to do the work and go through an employment program. Loranger says the street-cleaning operation mainly has contracts with Business Improvement Districts (BIDs), whose budgets are fixed. 

“They [the BIDs] have difficulty in raising their budgets quickly enough to adapt to the rising costs of our services, which of course would be driven by the wages,” Loranger told KPCC.  "They have a fixed budget, and we’ll work within that budget, but inevitably, that means fewer of our clients will be employed.”  

Loranger says the transitional employees only work for the Chrysalis business for a year and then move on to other jobs that pay, on average, $11.25 per hour.  The Chrysalis job, often as menial as pushing a broom on a sidewalk, simply prepares the client for the next job. "They're so grateful that someone has given them a second chance - or third chance, or fourth chance - to prove that they've got the drive to straighten out their life and allow them to build their resume," Loranger says. 

Hearing from Homeboy Industries

"I was a gang member for over 20 years, I’ve been in prison. I was an addict," said Jermaine Smith, a "trainee" at Homeboy Industries. He'd just watched the full City Council cast a vote on raising the minimum wage. 

Part of his rehabilitation program at Homeboy Industries is working for minimum wage in the merchandising department. He says that’s changed his life. "So I would be willing to cut my check in half to let the next man get the same opportunity." 

Homeboy Industries, founded by Father Greg Boyle, benefits in this debate from its branding on chips, baked goods and cafes. But the testimony of trainees like Smith has also made an impression on city council members, especially Gil Cedillo. 

"We want an exemption for trainees," Cedillo told reporters after casting a vote for raising the wage. "It's a difference between all the workers in this city - maybe 800,000 - and maybe 800 trainees, people who would love a second chance to join the working class."

Curren Price, who chairs the Economic Development committee has been cool to the exemption idea. "I don’t want to create a situation where we’re creating exemptions for some and not others," he explained after the same vote. "We certainly want to assist those organizations like Homeboy and Chrysalis, and we’re going to be looking at that in some detail in committee. "