LA City Minimum Wage Increase Could Raise City Budget By $1 Billion By 2028, City Report Finds

Raises for L.A. city workers negotiated between Mayor Karen Bass and employee unions earlier this year will add $1 billion to the city's yearly budget by 2028 if approved, according to a new report from the city's Administrative Officer Matt Szabo.

What's in the labor agreements

The proposed raises, which still have to be approved by the city council, include a bump in the minimum wage for city employees to $20 an hour effective this April, which increases to $25 an hour by 2026.

Szabo's analysis looked at the impact on the overall city budget through the 2028-2029 fiscal year:

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The current city budget

If the agreements are approved by the city council, the budget would immediately increase by $316 million next year, according to the CAO report. Next year's budget hasn't been released yet, but the city's total budget for this fiscal year is $13 billion.

The contracts up for approval cover increases in salary and benefits for tens of thousands of city workers in a range of unions, including thoe representing clerical workers, city engineers, librarians, building trades and others.

City budget woes

The city is already facing a shortfall of about $400 million in this year's operating budget, in large part due to an increase in salaries for the Los Angeles Police Department approved last August. Lawsuit settlements were also a major reason for the deficit, according to City Controller Kenneth Mejia.

Proposed fixes

Many city departments have been operating at a surplus in recent years because 1 in 6 city jobs are currently unfilled. A January report from the CAO recommended that these unfilled jobs be eliminated, with the exception of positions considered critical, including LAPD, the fire department, public works and correctional nurses.

State of the City address is this Monday

L.A. Mayor Karen Bass will give her State of the City address on Monday at 5:30 p.m., and is expected to unveil her proposed budget for the upcoming fiscal year, which begins July 1, later this month.

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