Memorandum - Minimum Wage Policy's Impact On Local Community Essay

Impact on the Economy

The necessity for an increase in minimum wage in Los Angeles is inevitable due to the high cost of living that has prevailed over the years. A thorough analysis of the wage bill provides a clear message that there it fails to meet the requirement of the minimum wage bill based on the current living standards of Los Angeles area residents. Los Angeles, which is home to many wealthy and high income individuals, is a commonly known fact. This may factor into the reason for the high cost of living in LA. The impact that the current wage bill has caused on the community has resulted in an increase of the overall poverty level within the community. Through properly evaluating the employment rate, one can see that despite the high number of employed individuals, too many are still languishing in poverty. This is attributed to the imbalance in current wages in relation to the living standards, which remain too high compared to the income that is earned (Reich, Jacobs, Bernhardt and Perry 4). It has been evaluated and established that workers in the region have less purchasing power than they did 35 years ago. Furthermore, an analysis of the economy indicates a significant drop in the purchasing power of residents, compared to previous years. The change in purchasing power is attributed to the wage bill that has not changed despite the shifts occurring in the international and local economy. This stagnation of the wage bill may be responsible for a decline in the value of the dollar compared to several years prior. While developing a plan of action for change, a consideration of the trend involving the large number of women who are suffering the impact of earning a low-wage is crucial to the community as well as the local economy. The wage bill hopefully will change the excessive petty crime that has become common among those earning minimum wage unable to afford the necessary expenses to sustain their families. The loss in monetary funds from the incessant theft by minimum wage workers occurring on a daily basis results in the millions of dollars. Developing appropriate policies may possibly minimize of put an end to the excessive theft that is rampant in the restaurant industry. If the goal to see a decline in the unfortunate trend of thievery among low wage earners is to be attained, then implementation of policies relevant to the minimum wage income must be taken seriously. The criminal behavior is growing among minimum wage earners compared to the middle class and high income earners who are not struggling as desperately as the lower class members of society.

Local Economy

An increase in the current wage bill will result in economic gains as higher income levels allow for increased spending. This is because every dollar increase in the minimum wage will result in an increase to the economy by a $1.12 stimulus. The benefit to the purchasing power is an almost guaranteed outcome of renewal of the wage bill goes into effect. Once the residents of Los Angeles earn more, they will be inclined to spend more. The circulation of money from worker to businesses will become an ongoing cycle that may ideally cause a very positive change in the economy. When the demand for goods and services increases, the need for more employment will also become a reality. One can only see that the shifts that will be possible from the changes brought on by the wage bill will be far greater than anticipated.
As the local economy finds a rise in the purchase of goods and services, the natural result of a demand for workers will provide more individuals who begin to enter contribute to the economy as they begin earning income from their jobs. This is because if there is the creation of new jobs within the city under a new wage bill, there is a possibility of tremendous growth. The region expected to see large amounts of growth with the creation of 46,400 new employment opportunities of which 24,875 will be in the city of Los Angeles. Progress of this type will be fueled by an increase in the restaurant industry and number of workers who will be working under new policies, which will facilitate growth. Growth of various sectors of the economy may be a possibility as new jobs facilitate new needs that different investors will come in to try and fill (Liu 1).
Through improved wages, provides more purchasing power by the local government as well when the amount of taxes collected is higher from the numerous new jobs, as well as higher income levels, hence larger tax funds. The state and local government projects an increase in revenue of $414 million, while the federal government collecting additional revenue of $546 million. In this respect, development of projects in both the city and nation become a likely reality with an additional amount of funds available to improve roads, structures, and other aspects of life managed by the government. These changes that will take place through federal government and states will have enough resources to put toward resources that will aid the local community. These projects may be used to meet the needs of the society while still resulting in increased revenue that will be returned to the local government’s treasury (Daniel et al 1). It is clear that the increase of the minimum wage will result in many positive changes. In addition to the numerous benefits discussed, a decline in the need for public assistance may also become a reality, further providing financial relief for citizens and the government (Craig 34). This is because more people will now be in a position to fund their expenditure. This is mostly in medical care whereby the local government can save on taxpayers’ money and use it on other matters.

Crime Rate

The crime rate will hopefully decline as well through an increase in minimum wage. Unfortunately, it is desperation of the lack of income that leads to crime. With the change in the policy of setting minimum wage at higher hourly rate, a decrease in crime will automatically be noticed. This is because many people are forced into crime due to their current situation where they cannot afford what they need (Durr, and Shirley 45). An estimation of the excessive number of employed individuals in the city living below the poverty line shows the struggle that encourages unethical criminal behavior when no other option is available. A proper wage will allow people to earn enough to meet their needs and live more comfortably, which may eliminate or at least decrease the crime rate.

Works Cited

Craig, Clyde E. Basic Labor and Employment Law for Paralegals. Austin: Wolters Kluwer Law & Business, 2009. Print.
Daniel, Flaming, Halil Toros, Yvonne Yen Liu, Patrick Burns, Lucero Herrera, UCLA Labor Center, Tia Koonse, UCLA Labor Center, Saba Waheed, UCLA Labor Center and Robert Habans, UCLA Institute for Research on Labor and Employment Underwriter: Los Angeles County Federation of Labor. Los Angeles Rising. Economic Round Table. Web. 19. March. 2015.
Durr, Marlese, and Shirley A. Hill. Race, Work, and Family in the Lives of African Americans. Lanham, Md: Rowman & Littlefield Publishers, 2006. Print.
Liu Yen Yvonne. Raising Los Angeles Minimum Wage to $15.25 Will Benefit Communities. Economic Round Table. Web. 19. March. 2015. http://economicrt.org/press-release/raising-los-angeles-minimum-wage/
Reich Michael, Jacobs Ken, Bernhardt Annette and Perry Ian. The Mayor of Los Angeles City Minimum Wage Policy: A Prospective Impact Study. Center on Wage and Employment Dynamics. 2014.