(Jan. 7, 2016, 5:30 a.m.) -- As seen LIVE on LBREPORT.com, reported as breaking on our front page (www.LBREPORT.com) and on our Facebook page, LB's Mayor-chosen, Council-approved Economic Development Commission (advisory body to the City Council) voted after roughly four and half hours of presentations, polarized public testimony and Commission discussion) to recommend to the Council (base motion by chair Frank Colonna) a minimum wage policy with the following elements:

• Beginning Jan. 1, 2017, a minimum wage of $10.50/per hour

• Beginning Jan. 1, 2018, a minimum wage of $12/per hour

• Beginning Jan. 1, 2019, a minimum wage of $13/per hour.

• Small businesses (defined as 25 or fewer employees) and non-profits would have a one-year delay to implement each element of the pay tiers (i.e., would start at $10.50 per hour on Jan. 1, 2018)

• Employers that hire individuals that qualify for state subsidies (such as under Workforce Investment Act) shall be exempt from the LB minimum wage ordinance but will adhere to the CA state minimum wage
• Commission urges the Mayor/Council to take a leadership role in changing state law regarding tipped compensation and consider sick days and wage theft enforcement
• Commission recommends a review of the impacts of LB minimum wage policy at the end of 2019 with a report back to the Council by 2021
• Recommends Council ask City Att'y to examine the possibility of possible City options to address the issue of "total compensation"
• Recommends (Comm'r Blair inclusion) that the City explore and consider actions that may help to mitigate negative effects of the minimum wage on LB businesses because of a higher minimum wage.

[Scroll down for further.]

Minutes after the Commission's vote, supporters of a $15/hr minimum wage by 2020 with no exemptions issued a release quoting L.A. County Federation of Labor Exec. Sec'y/Treasurer Rusty Hicks as saying:

"We believe that the City Council and Mayor would only adopt a policy that helps Long Beach residents escape poverty and support their families -- not the opposite -- despite the Commission's recommendations for low wages and exclusion."

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The Commission's voted action effectively recommends a minimum wage level by 2019 consistent with a December 31, 2015 city management memo to the Mayor/Council which estimated a $13/hr minimum wage by 2019 would cost LB's General Fund (LB taxpayers) about $800,000 (phased in, total structural cost from FY17 to FY19) in contrast to an estimated $1.4-$1.5 million for a $15/hr minimum wage (total structural increase by FY 2021 with no exemptions (the position urged by the Raise the Wage coalition, the L.A. County Federation of Labor, low wage workers and some local non-profits.)

Prior to the Commission meeting, the leadership of LB's Council of Business Associations (COBA), the LB Area Chamber of Commerce, Downtown LB Associates and the L.A. County Business Federation (BizFed) announced that they'd reached a "consensus" in supporting 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; a one year delay on implementation for business with 25 or fewer employees; a two year delay on implementation for 501(c)(3) non-profits and a youth wage for 21 years old and younger paid at State of California minimum wage rate.

The business groups also cited a COBA/Chamber commissioned survey on perceptions within the LB business and non-profit sectors of potential economic impacts if the Council were to set a minimum wage. It found that 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.)

At the Commission meeting, supporters of the $15/hr minimum wage by 2020 package took aim at the COBA survey's methodology, saying it was biased, non-randomized and shouldn't be viewed as credible. Supporters cited an October 2015 report, released by the L.A. County Federation of Labor and conducted by the non-profit Economic Roundtable, that contended raising the minimum wage to $15/hr would "have a broad stimulus effect on the region and would benefit businesses, workers, and the economy" (full report here.)

Reps from a number of LB non-profit reps said they didn't want an exception to the $15/hr minimum wage by 2020 (although at least one non-profit rep said her group's funding situation required the exception.)

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To LBREPORT.com's knowledge, no organized LB business or political group took a public position plainly opposing any action by the LB City Council in adopting a city minimum wage; the issue for LB's organized business community leadership appeared to be how high a LB minimum wage should be and on what terms...although a number of individual business owners felt otherwise.

That tension surfaced at the Commission meeting. Third year LB business owner Jane Kelleher spoke in more sweeping terms against what she viewed as increasing government regulation of businesses "was indicative of a trend in recent years toward going away from our traditonal system of capitalism and creating wealth to a system of government induced and enforced redistribution of wealth"...and that it would eventually reach a tipping point where it would "kill the goose that laid the golden egg." Ms. Kelleher cited examples and when she'd concluded, Commission member Robert Olvera [President ILWU Local 13] said he had a question for her: "Do you think that a job at Subway is a 'golden egg?'...If you're living in a world, or a reality, where a job at Subway is a golden egg, then I really don't know what to say." Ms. Kelleher sought an opportunity to respond but a City Attorney office rep quashed the interaction, advising the Commission to allow public comments without questioning the public speakers about their comments. To hear the exchange, click here.

Chair Colonna pressed throughout the meeting for a unanimous vote...and got it with his motion, smoothing over moments of dissent. "Good job," chair Colonna said following the vote.

LB's Economic Development Commission, selected by Mayor Garcia and approved by the City Council, is comprised of [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].

The Commission's voted recommendation now goes to the City Council...where a Council majority will have the last word (subject to a Mayoral veto that six Councilmembers can override.)

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Long Beach City Hall entered the fray on adopting a local minimum wage as a result of an Aug. 11, 2015 City Council action. The 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.)

The months earlier 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.

The L.A. County Federation of Labor -- which is politically active and has applied its resources in LB 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.

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.

Developing.