Los Angeles is on the Wrong Path
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The city of angels is not really recovering from the Great Recession. Nearly eight years ago, when a nationwide financial crisis triggered and set in motion the worst economic downturn of the 21st century on Alan Greenspan’s and Barnie Frank’s watch, unemployment in Los Angeles soared to over 13%.
The recession blasted the city and today its unemployment level is still 8.7%, which is nothing to cheer. It is actually much higher because this number does not reflect the number of people who have given up trying to find a job.
The city of angels is not really recovering from the Great Recession. Nearly eight years ago, when a nationwide financial crisis triggered and set in motion the worst economic downturn of the 21st century on Alan Greenspan’s and Barnie Frank’s watch, unemployment in Los Angeles soared to over 13%.
The recession blasted the city and today its unemployment level is still 8.7%, which is nothing to cheer. It is actually much higher because this number does not reflect the number of people who have given up trying to find a job.
Table of Contents
A Snapshot of the Core Factors
The best way for the city to encourage growth and restore the once thriving city back to its former glory is the topic of much debate and controversy. The task of overcoming LA’s unevenness and erratic recovery is not an easy one, nor is it going to happen overnight. Many speculators believe that government intervention is the only feasible method of rectifying the local economy’s stagnation. Other people believe that the government should get out of the way.
LA needs to lower its taxes, stop regulations that kill jobs, and stop proposing new taxes to take more money from the private sector. This is according to business groups in Southern, CA.
Raising the MW is not the Answer
These same interest groups feel that such government dilly-dallying landed the country in this mess in the first place. Government intervention initiatives such as hiking LA’s minimum wage (MW), expected to help some workers recover, only hurt their employers and undermined job creation across the board. When has increasing the MW ever helped anyone? Anyone who owns a small business knows that this does not help the owners expand or hire new employees.
There are those who believe there should not be any MW at all. Why not allow the private sector create their own wage rates? If someone does not like their pay, they can simply find another job and there will be plenty of them because of the lack of regulation. This is logical. Many jobs could exist for $6 per hour.
Some people believe that you should be able to raise a family on a MW salary. That is ridiculous and not the basis for the MW. MW jobs attract young and unskilled employees and $10 an hour is not feasible in so many industries and does not make sense.
The Los Angeles County Economic Development Corporation is hopeful that the city, although not firing on any cylinder that well, is on the right path. Except not everyone is surviving that well and many business leaders disagree with this assessment. As new jobs appear, many of those in professional business services such as tourism, especially seasoned hotel and restaurant workers, feel that the recovery is catering to only a certain section of society.
Raising Business Costs puts Businesses in a Drastic Situation
In most of these cases, workers are illegal immigrants with no legal rights who live in the fear of deportation by their own employers if they voice their concerns. As is commonplace in a city as large as LA, employers hire such “stateless” immigrants and then call authorities to have them deported to avoid having to pay them. This has sadly become a part of their business plan. Well, what else can they do when taxes rise, businesses have to save money? In addition, it is not the fault of businesses that the southern border is unsecure. That is entirely another topic. You can blame that on the White House.
LA, Like Chicago & NYC, is on the Wrong Path
LA still has not found the winning combination. This city is run by Democrats who rarely understand businesses needs and do not understand that lowering taxes is actually better for the private and the public sector simultaneously.
