Apr 22, 2018 | Updated: 09:54 AM EDT

Los Angeles Leads the Way to a Higher Minimum Wage

May 20, 2015 03:26 PM EDT

In an overwhelming vote of 14-1, the City Council of Los Angeles will increase the city's minimum wage from $9 an hour to $15 an hour by 2020, which is good news for the nation's second-largest city where almost a quarter of its residents live below the poverty line.

The vote reflects a trend toward an improved living wage for a large majority of workers. Facebook and Walmart have already increased their lowest wages and other California cities, such as Oakland and San Francisco, are moving toward wage increases as well.

"The effects here will be the biggest by far," economist at the University of California, Berkeley, Michael Reich says. Reich has conducted several studies on the potential effects of a minimum-wage increase. "The proposal will bring wages up in a way we haven't seen since the 1960s. There's a sense spreading that this is the new norm, especially in areas that have high costs of housing."

Advocates for the improved minimum wage hope to see the trend continue throughout California and beyond, which would bring much-needed relief to a country whose central economic challenge is wage stagnation. According to the Economic Policy Institute, over the past thirty years, the vast majority of American workers have seen their wages stagnate or decline, despite real GDP growth of 149 percent and net productivity growth of 64 percent during this same period.

New York appears to be following suite. Gov. Andrew Cuomo announced earlier this month that he would convene a board to explore wage increases among fast-food industry workers. Despite the fact that New York's minimum wage stands at $8.75, $1.50 above the federal standard, more than one-third of workers across the city and state currently make below $15 an hour, according to the New York Times.

The L.A. Times reports Los Angeles' vote will affect as many as 800,000 workers, making L.A the largest city in the nation to adopt a major minimum wage hike.

"Make no mistake," said Councilman Paul Krekorian, who helped orchestrate the city's plan. "Today the city of Los Angeles, the second biggest city in the nation, is leading the nation."

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