New L.A. Minimum Wage Likely to Have Minimal Impact on Entertainment Business

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Signage is displayed on the water tower at the Sony Pictures Entertainment Inc. studios in Culver City, California, U.S., on Thursday, Dec. 18, 2014. 

The landmark minimum wage increase approved 14-1 by the Los Angeles City Council Tuesday is unlikely to have much impact on Hollywood, where primarily non-union workers, like production assistants, are likely to be touched by the legislation.

Los Angeles is now the largest city to adopt the $15 dollar-an-hour minimum, a $6 increase on the current floor and one of organized labor's major national goals. The increase will be phased in through 2020. Two of the measure's biggest supporters -- L.A. Mayor Eric Garcetti and State Senate President Pro Tem Kevin de Leon (D-LA) -- also were instrumental in pushing new film industry tax breaks through the legislature.

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Most Hollywood production and service workers are union members and already receive wages well above the minimum, as well as benefits. One longtime Hollywood veteran told The Hollywood Reporter that "the only segment of the industry where a significant number of people will benefit is in adult films."

Outside the film and television industries, the council's ordinance is expected to improve the finances of 40 percent of the city's work force, about 800,000 women and men.

"I started this campaign to raise the minimum wage to create broader economic prosperity in our city and because the minimum wage should not be a poverty wage in Los Angeles," Garcetti said. "I look forward to signing this legislation."

De Leon told THR that, "It's a great day for workers in the City of Los Angeles who toiled for wages well below their worth, and for the L.A .City Council which recognized that the workers struggling with poverty deserved a pay raise and better protection. It's a great victory for working families who love the city of L.A., who want to work in the city of L.A., but who need more money to survive with their children."

The Democratic legislative leader, who has long represented much of historic Hollywood, agreed that, "People who work in production in Los Angles are not at minimum wage, but slightly higher. But as I negotiated the Hollywood tax credit last year, our goal was always to make sure that these jobs didn't flee to other states."

Does de Leon worry that the wage hike might, in fact, trigger more runaway production?

"That mind set flies in opposition to all the hard work we did in negotiating the most comprehensive film tax credit in the history of the state of California," he counters. "If because of the minimum wage they decide to move to another state ... don't come back."

Los Angeles city film czar Ken Ziffren said he believes the measure will have "no material effect," even for non-union members. "Even if people are non union, I believe they are all well over the cap," he said. 

In the union arena, a few performers and others in new media may benefit, since pay rates for such work are generally subject to free bargaining under the guild sideletters. Such bargaining will be constrained by the new minimum wage, which will be indexed to inflation beginning in 2022.

Meanwhile, performers in short films and various low budget categories get a raise July 1 that keeps them ahead of the new LA minimum wage ($10.50), thanks to action taken earlier this year by SAG-AFTRA's board.

Background performers will see a 3 percent increase from their current rate of $152/day ($19/hour), also effective July 1 of this year, a byproduct of the 2014-2017 collective bargaining agreement. The performer's union declined to comment on the City Council's action pending an analysis.

This article was first published by The Hollywood Reporter.