Sometimes I feel the city of Los Angeles and the business community have a dysfunctional relationship straight out of a pop song. “I love you, you’re perfect,” croons the city, “but can’t you just be a little bit more like someone else?”
Driving along Victory Boulevard last week, I saw billboards on bus stops announcing that the city was going to raise people out of poverty. They are achieving this, the billboards proclaim, by raising the minimum wage to $15 an hour and requiring employers to provide a minimum of six paid sick days a year.
The business community has been vocal against the city’s minimum wage increase for over a year now, and I thought I had written my last column on the issue. But I was wrong. Those billboards were infuriating, and completely ignore the reality of our city leaders’ actions.
A minimum wage increase does not lift people out of poverty. Increasing sick days does not lift people out of poverty. Adding regulations, taxes and edicts from on high do not lift people out of poverty.
There is one way to sustainably lift people out of poverty, and that is to grow a strong economy that provides long-term, good-quality jobs.
And private enterprise is the only thing that can achieve those goals.
There are many things that business is: innovative, productive, and yes, profit-driven. Profits come from creating value, and adding that value to the economy. The value benefits us all, by growing our retirement accounts, by providing us with technology that a few decades ago was science fiction, by offering us any possible configuration of coffee we could want from the comfort of our air-conditioned, electric car.
There are also many things that business is not: a charity, a social service center, an ideological experiment.
Our city leaders are proud of the fact that Los Angeles is the fourth biggest economy in the country. Who built that economy? Business leaders and innovators.
And so it feels like the city is saying to the business community: We love you, you’re wonderful, but please be just a little bit more like a charity, a social service center, an ideological experiment.
The city of Los Angeles is not raising people out of poverty. It is not paying workers. It is placing an additional burden on businesses and hoping that they are innovative enough to bear it.
And guess what? Businesses will adapt. They will survive. They will even thrive.