Despite the fact that Los Angeles has signed a law into place that will raise the minimum wage throughout the city, small business owners are saying they are not concerned by the change. Rather, the reports that they are very optimistic about revenue growth, and many have are making plans to hire new employees next year.
Increasing the Minimum Wage in Los Angeles
Earlier in the year, Los Angeles Mayor Eric Garcetti signed a new law that will raise the minimum wage from the $9 per hour that is in place now to $10.50 per hour by next July. The law further stipulates that the minimum wage will increase gradually over the next few years before reaching $15 per hour by 2020.
In an effort to mitigate the negative effects that the law could have on small businesses, the law includes a one-year delay for those businesses with 25 or fewer employees. After the bill was passed, some small business owners in the area expressed concerns about the impact of the bill. Nationwide, 35 percent of small business owners were concerned about minimum wage increases, while 40 percent of small business owners in Los Angeles expressed the same concern. These same small business owners also expressed concerns about interest rate hikes and the upcoming presidential election, with 40 percent being concerned with interest rates and 37 percent being concerned about the election.
The Growth of Small Businesses
Despite having previously expressed concerns about minimum wage increases, 68 percent of small business owners in Los Angeles report that they expect to increase their revenue over the next 12 months. Furthermore, 62 percent of these small business owners said they plan to hire more people within the next year. These figures are twice what small business owners were reporting two years ago.
Interestingly, while the majority of small business owners in Los Angeles expect to increase revenue and increase hiring, many do not seem too confident in the city’s economy. Just 53 percent of small business owners said they expect the economy to improve over the next year, which is down 9 percentage points when compared to last year. When examining the national economy, small business owners expressed little change in their confidence, with 47 percent expressing confidence in 2014 and 48 percent expressing confidence in 2015. At the global level, confidence increased from 29 percent in 2014 to 33 percent in 2015.
Changing the Workplace
With small business owners in Los Angeles realizing that talented employees are the key to their success, many are looking for ways to attract the highest caliber of employee. As such, many have reported that they are placing an emphasis on flexible, tech-friendly work environments where collaboration is encouraged. They are also increasingly offering nontraditional perks, such as providing areas for employees to relax, offering transportation stipends and allowing employees to bring their pets to work.
The bottom line is that Los Angeles continues to be a booming area of growth and progress. If you are interested in being a part of what Los Angeles has to offer, contact our team of professional real estate experts to learn more about the most exclusive communities in Southern California.
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(all data current as of 5/25/2017)
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