(Jan. 6, 2016, 6:08 a.m.) -- At 3 p.m. today (Weds. Jan. 6), LB's Mayor chosen/Council approved Economic Development Commission (membership indicated below) has scheduled a special meeting in the City Council Chamber at which it could vote on recommendations to the City Council regarding a LB minimum wage policy. The item as agendized is: "Recommendation to conclude discussion on a minimum wage policy for the City of Long Beach and formulate recommendations to the Mayor and City Council for their consideration."

The Commission's agendized items includes a memo by Financial Management Director John Gross, quietly sent to the Mayor and Council dated Dec. 31, that includes a Fiscal Impact analysis estimating a cost of $1.4 million by FY21 to the City's General Fund ($1.5 million in all funds) if the Council were to raise the minimum wage to mirror the L.A. City Council's minimum wage ordinance ($15/hr by 2020.) City management acknowledges that its estimate is based on multiple assumptions and comes with various caveats. City management estimates that if the Council were to adopt a minimum wage ordinance of $13 an hour, phased in over three years, the total structural budgetary impact to the General Fund by FY19 would be $798,254 ($850,303 all funds.)

City management's estimate included four potential budget impacts: increased staffing costs, increased contractor costs, costs of city enforcement options and potential impacts of "small business minimum wage incentives."

To view city management's Dec. 31, 2015 memo in full, click here.

The ultimate decision on the matter will be made by a City Council majority.

[Scroll down for further.]

On Aug. 11, 2015, the City Council voted 9-0 to approve an item agendized by Vice Mayor Suja Lowenthal, joined by Councilmembers Lena Gonzalez, Dee Andrews and Rex Richardson to "direct City Manager to request a report from the Los Angeles County Economic Development Corporation (LAEDC) regarding 1) the feasibility of and potential benefits and risks of implementing a citywide minimum wage in Long Beach; 2) proposals for incentives, tax breaks, fee reductions and/or process improvements to assist businesses and non-profit organizations in complying with a higher minimum wage; and to work with the City's Economic Development Commission to take public input and review the study's findings and make recommendations to the City Council." Their agendizing memo stated in part: "The report should include data and survey work about the minimum wage and possible incentives for businesses. If a minimum wage increase is to be considered, incentives for businesses and or non-profits in the city should also be considered and discussed." (To view the agendizing memo in full, click here.)

To LBREPORT.com's knowledge, no organized LB business or political group argued against the notion of the LB City Council adopting a city minimum wage; the only issue for the leadership of LB's organized business community was by how much and on what terms. [LBREPORT.com stood alone in editorially advancing the position of the late Nobel Prize winning economist Dr. Milton Friedman: Opinion / VIDEO: Nobel Prize Winning Economist / Professor Milton Friedman On The Minimum Wage)]

LB's organized business leadership also remained publicly silent as other surrounding political bodies moved to adopt rising minimum wages.

In May 2015, the L.A. City Council voted 14-1 (Englander dissenting) to adopt a minimum wage that will rise to $15 an hour by 2020, making L.A. the largest city in the nation to do so. In September 2015, an L.A. County Board of Supervisors majority voted 3-2 (Knabe and Antonovich dissenting) to raise the minimum wage in unincorporated areas by $15 an hour by 2020 tied to the Consumer Price Index.

Proponents of a city minimum wage then turned their attention to L.A. County's second largest city: Long Beach. The Los Angeles County Federation of Labor -- a politically active group that has applied its ample resources in Long Beach City Council elections -- began pressing to have the City of Long Beach set a Long Beach minimum wage of $15 an hour tied to the cost of living, plus sick days beyond the state mandated the days and wage enforcement. In October 2015, the group released a report by Economic Roundtable that contended raising the minimum wage to that level would "have a broad stimulus effect on the region and would benefit businesses, workers, and the economy" (full report here.)

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On November 13, 2015 Long Beach City Hall released the results of the LAEDC study it had paid to receive. In pertinent part the LAEDC study stated:

[LAEDC report, Exec. Summary, p. 2] In the "best case" scenario, approximately 33,000 workers would be affected by 2017 if the minimum wage were $12.00 per hour, receiving an increase in annual earnings on average of $940 (over current earnings), and approximately 45,700 workers would be affected as the minimum wage reaches $15.00 per hour in 2020, receiving an increase in annual earnings on average of $5,160 (over current earnings);

In the "worst case" scenario, up to 14,000 workers would be most at risk of being negatively impacted through reduced hours, job loss or substitution by 2017; this number would grow to 20,700 by 2020.

Firms that currently employ minimum wage workers and who will be impacted by future increases will likely respond to their increased labor costs using one or more of the following strategies:

• Increasing prices, as 93 percent of all business with minimum wage workers responding to our survey state is likely;
• Absorbing cost increases through reduced profits, as 90 percent of employers with minimum wage workers responding to our survey say is likely
• Substituting the lowest skilled workers with employees that are more productive, as 70 percent of employers of minimum wage workers responding to the survey say they will expect their employees to take on additional duties;
• Reducing employment by eliminating jobs, as ten percent of employers with minimum wage workers responding to our survey believe is likely or by cutting hours of existing employees, as three percent of such employers believe is likely
• Reducing or delaying future employment by not replacing voluntarily separated workers;
• Smaller firms have the fewest options for managing cost increases and impacts will be more pronounced.

Over the long term, the relative costs of capital and labor may encourage more automation. At the time the LAEDC survey was fielded, 29 percent of employers of minimum wage workers were undecided about the likelihood of substituting capital for labor. However, this is a trend that has been underway for most of the twentieth century and will continue into the twenty first as well.

• If this were to occur, transitioning displaced workers into other occupations may be challenging if such workers face skills mismatches;
• Employment opportunities for those at the bottom of the skills ladder will be diminished including youth;
• Business operations will become more efficient as marginal firms close or relocate.

To view the LAEDC study results, click here.

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In December 2015, LB's Council of Business Associations publicly announced that it had reached a "consensus" reflecting a set of recommendations. The LB Area Chamber of Commerce supports the proposal, along with Downtown Long Beach Associates (DLBA) and the Los Angeles County Business Federation (BizFed).

• A $12.50 per hour minimum wage (compensation includes paid benefits such as health care and paid time off including state mandated sick days, but not tipped employees) to be implemented over a five-year period.

• One year delay on implementation for business with 25 or fewer employees

• Two year delay on implementation for 501(c)(3) non-profits

• Youth wage for 21 years old and younger would be paid at State of California minimum wage

COBA also released in December the results of a survey of perceptions within the LB business and non-profit sectors of potential economic impacts if the Council were to set a minimum wage at some not-yet determined level. COBA's survey, conducted by a firm contracted by COBA via the LB Area Chamber of Commerce and DLBA, found that with a wage increase in place roughly 40% of those surveyed indicated they would try to hire more skilled workers from outside of Long Beach over local unskilled workers...and businesses near the border of other cities were very concerned about becoming less competitive. To view the survey in full, click here.

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City Hall's Economic Development Commission that will be meeting and potentially voting today on a recommendation to the City Council consists of members chosen by Mayor Garcia and approved by the Council. Its current members are [our brackets for identification] Becky Blair [commercial real estate broker], Blair Cohn [Exec. Dir Bixby Knolls Business Improvement Ass'n], Cyrus Parker-Jeannette [CSULB College of Arts], Frank Colonna [realtor and retired 3rd dist. Councilman/Vice Mayor], Kristi Allen [VP Ops/Ensemble Hotel Partners], Michelle Molina [Millworks, DLBA Board President, spouse is Molina Health Care CFO], Paul Romero [Long Beach Convention & Visitors Bureau], Ralph Holguin [RMD Group CEO], Randal Hernandez [Gov't Relations Union Bank], Robert Olvera [President ILWU Local 13] and Walter Larkins [CDR Benefits].

Developing.

An earlier version of this story misstated the name of the Council of Business Associations as the Council of Business Organizations, corrected in the text above.

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