TWO weeks after Los Angeles County Supervisor Sheila Kuehl delayed the vote for a month on her proposal to raise the citywide minimum wage by 2020, LA city officials are taking steps to help small businesses move forward amid growing concerns.
The Board of Supervisors announced on Tuesday, July 7 that it looked at its own hiring practices, and has opted to explore policies that would increase the number of local small business the county goes business with.
The supervisors unanimously approved Supervisor Mark Ridley-Thomas’ motion to study the implementation of a county-wide participation goal of 25 percent for local small businesses, and 3 percent for disabled veteran-owned businesses in county purchasing agreements and contracts—a total of about $6.6 billion annually.
Less than 2 percent of the companies the county has contracts with and makes purchases from are considered small businesses, Ridley-Thomas said.
“We are all quite concerned about and supportive of small business enterprise, particularly as we know those entities employ about half of all the jobs in Los Angeles County,” he continued. “It’s hardly insignificant that the healthier they are, the better we are in terms of our economy.”
Supervisor Hilda Solis, who asked the county to develop a plan to help small businesses implement any wage hikes and cares for her district’s mom and pop businesses, supported Ridley-Thomas’ motion.
“Two percent is not acceptable,” Solis said in a statement. “We can do better than that. We’re a powerful marketplace here. The county can leverage in so many ways our assets.”
Stuart Waldman, president of the Valley Industry and Commerce Association, said it’s “admirable” for the county to do what it can to help small businesses.
“There are a lot of companies out there that having a government contract would really be the difference between them being successful and them failing,” Waldman said. “I think it will be hugely beneficial. Two percent is a very small number that is a long way to go to raise that number up.”
Waldman said the association opposes the minimum wage increase because he feels the proposed hike will hurt small businesses.
Ridley-Thomas’ economic development deputy, David Riccitiello, said, “The action to increase small business’s participation in county contracts predates the discussion on raising the minimum wage. The county’s Small Business Commission recommended about a year ago that the county adopt a participation goal for purchasing agreements and contracts with small businesses.”
“They are coming together at the same time, which I think is a good thing,” Riccitiello said. “They have similar goals in mind in trying to pull people out of poverty by giving them a living wage.”
Businesses contracting with the county must pay higher base wages, known as the “living wage.” Ridley-Thomas has said he plans to propose an ordinance that would boost the county’s living wage to $15, or up to $15.79 per hour by 2018.
The minimum wage hike proposal by Supervisor Sheila Kuehl will be brought back before the board on July 21.
In 2002, LA county created the Local Small Business Enterprise Preference Program, but the board did not adopt a policy to encourage small businesses to apply for contracts.
In 2006, the state implemented a 25 percent participation goal for small businesses in state contracts and 3 percent for disabled veteran-owned businesses. About 22 percent of the companies the state contracts with are small businesses and about 4 percent are veteran-owned businesses, according to Ridley-Thomas’ office.
The board also asked county staff to explore adopting a goal for participation with social enterprise businesses, including businesses that hire men and women who have been recently released from prison.
In a late June testimony before the supervisors, LA Mayor Eric Garcetti said he represented the residents of Los Angeles who work in unincorporated areas of the county.
“Our challenges don’t stop at city limits, and so I think to work for a solution, we need to cross those borders and those boundaries,” Garcetti said, believing that once the county raises its wages, other cities are soon to follow.
“There will still be some cities that don’t,” he said. “It’s always been my strong opinion those will be tough cities to attract the best workers into.” (With reports from Los Angeles Daily News)
