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Minimum Wage Skyrockets — How West Hollywood’s Unanimous Decision Could Influence US for Better or Worse

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The West Hollywood City Council has approved a minimum wage hike for hourly workers in hospitality, retail, food service, and other industries that is the highest in the nation. The hourly wage for West Hollywood rises to $17.64 an hour in January, the LA Times reported. Currently, minimum wage workers in West Hollywood earn between $13 and $14 an hour, depending on the business.

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Some are calling the wage-hike “life-changing,” according to the LA Times. Sandra Pellecer, who has worked as a cook in hotels across the city, told the Times, “Not only is it going to support me and hotel workers across the city, but also it’s going to help all workers across West Hollywood earn a better wage.”

Beginning January 1, 2022, hotel workers will earn a minimum of $17.64 per hour, which is the same as the minimum wage in neighboring Los Angeles and Santa Monica, said the LA Times.

Wages for other workers will increase incrementally, beginning with an increase in January to $15.50 for workers at large businesses and $15 for workers at small businesses. There will be another increase in June 2022, and, by January 2023, these employees will be making $17.50 and $17 per hour, respectively.

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West Hollywood’s mayor pro tem Sepi Shyne told the LA Times that the goal is to have all groups earning roughly $18.77 an hour by July 2023.

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The new ordinance includes more than a wage hike. Workers will now get at least 96 hours (more than two work weeks) of annual paid sick, vacation and personal leave.

Some small business owners shared concerns that the increase could cripple hospitality businesses already suffering from shutdowns and a loss of business during the pandemic. If the wage hike leads restaurant and hotel owners to raise prices, reduce services or cut hours, it could have the opposite effect than was intended. Current employees would have to work even harder to provide the level of service people expect — something that is already happening due to the labor shortage.

Some West Hollywood business owners are calling the increase “unsustainable,” noting that they couldn’t keep their business open with the increase in payroll that would be required. If businesses close, fewer jobs would be available to help people recover from pandemic-related job loss.

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Yet, even the increase may not be enough to make West Hollywood affordable for many people. A GOBankingRates’ study on the cost to live comfortably in American cities showed that you would need an income exceeding $100,000 a year in Los Angeles. Meanwhile, the median income is just $54,501. A minimum wage worker earning $17.64 per hour would make roughly $36,691 annually, assuming 40-hour workweeks and access to PTO.

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