The wage increase is to be phased in over time, so the immediate impact may not be felt. But businesses ought to keep score when the effects hit so that officials will be cognizant of the consequences. If the wage increase does not cause economic disruptions and businesses do not actually leave Los Angeles, the business community’s credibility will suffer in the face of a mere exercise in rhetoric.

The vote to pass the minimum wage increase was 14 to 1. The council gets to vote once more on the measure after an ordinance is drafted by the city attorney, but the lopsided vote indicates there is no turning back. The council even set the wage above the recommended level offered by Mayor Eric Garcetti, who initially proposed an increase to $13.25 an hour.

The city council’s version contains an inflation clause and offers an extra year for small businesses and nonprofits to comply.

However, the business community does not consider these admissions enough. Ruben Gonzalez of the Los Angeles Chamber of Commerce said, “There is simply not enough room, enough margin to absorb a 50 percent increase in labor costs over a short period of time.”

The chamber’s president and CEO Gary Toebben wrote to his members about the many small business owners who testified in various hearings on the measure. He wrote, “They also talked about the likelihood that in order to provide a wage increase for some employees, they would have to reduce hours for others.”

Toebben noted wryly, “Last week, there were banners hanging throughout City Hall celebrating Small Business Week. There are many small business owners in L.A. who don’t feel like the city is celebrating them today.”

Earlier on the day of the vote, the Los Angeles County Business Federation (BizFed) released a survey on business conditions in the area. According to a release from BizFed, “The city of Los Angeles stood out again as being cited most frequently by employers as unfriendly.  Santa Clarita and Glendale were ranked in the top 5 most business friendly cities, which is notable because officials from those two cities are actively courting city of Los Angeles businesses in light of the proposed city of Los Angeles minimum wage increase.” (Author’s emphasis.)

So what will Los Angeles businesses do? Once the minimum wage law takes effect will there be jobs lost or hours cut? How many businesses move to a different location? Business credibility is on the line. Crying wolf and not acting will damage efforts to turn around what many decry as unfriendly business policies.

Toebben said trust your experiences — when wages go up speedily, businesses, especially small businesses, have to cut somewhere. If minimum wage is increased there would be fewer jobs (just as the Beacon Economics study sponsored by the Chamber stated, up to 140,000 fewer jobs over five years).

Hicks said it is common sense — if workers have more money they will spend the new money, which will increase the economy and create jobs (46,000 new jobs according to the Economic Roundtable who did its study for the Labor Federation).

The third study by UC Berkeley, done at the behest of the LA City Council, decided the lives of low-wage earners would improve which would overshadow job losses.

Since the dueling studies didn’t offer clarity to observers considering the question of raising the minimum wage, perhaps the debaters could break the gridlock. Reflecting the studies they sponsored, the debaters rolled out familiar arguments to buttress their positions.

Hicks argued that increasing the minimum wage for those barely getting by would decrease government subsidies in such things as child care and food stamps, saving the taxpayer dollars. Toebben said implementing a minimum wage increase of 50 percent in three years and 75 percent over 5 years, as proposed, would slow job growth in half and reduce revenue for city services for low-income families.

Hicks argued that business has claimed job loss as a result of minimum wage increase since the minimum wage came into being in the 1930s, and that has not happened. Toebben countered that business will have to compensate for the increased wages in some way. If not layoffs, then reductions in charitable contributions or advertising, for example, would come into play.

Toebben insisted that he was defending small business, which would be most affected by the increase. “This is all about Main Street, not about Wall Street,” he said.

Hicks conceded that exemptions might be made for some organizations like non-profits, some small businesses or young workers to ease the conversion to a higher minimum wage. The Chamber president said if no accommodation is made Los Angeles will have a reputation of a place not to start a business.

Common ground? Perhaps a small patch of turf, but not much more. Figuring out the exemptions and who gets what could be a regulatory nightmare, not to mention a field day for lobbyists.

The minimum wage increase proposals in Los Angeles include Mayor Eric Garcetti’s plan for an increase from $9.00 an hour to $13.25 by 2017. A city council proposal calls for an increase to $15.25 by 2019.

Other major West Coast cities — Seattle, San Francisco, Oakland — have already lifted their minimum wages recently. Could Los Angeles learn from those experiences?

Rusty Hicks said it was too early to measure the true impact, but he said there are now more restaurants in San Francisco since the minimum wage law was changed. To which Gary Toebben replied restaurants have closed in Oakland because of the minimum wage increase.

The studies didn’t give any clarity to those considering the minimum wage deliberations. The Town Hall debate probably didn’t change too many minds, either.

Both sides have reached an impasse. It’s likely that Republicans will now try to tie any government funding deal to another deal that raises the debt ceiling, which will hit its limit on October 15. That’s not necessarily going to happen.

President Obama has repeatedly demanded a clean-CR (continuing resolution) and a debt-ceiling increase with no strings attached. Senate Majority Leader Harry Reid, believing that Democrats will win the political battle, has followed Obama’s lead. Both sides are effectively waiting each other out, seeing who will buckle under political pressure first. (All of the major congressional leaders are set to meet with the president Wednesday evening, but it’s still unlikely that this will produce a deal anytime soon.)

In other words, this probably isn’t going to be a quick shutdown. And while dysfunction reigns in the capitol, California is taking a beating. The world economy certainly won’t collapse anytime soon, but there is undeniable evidence that furloughing hundreds of thousands of workers will have immediate effects on the economy. As the shutdown continues, it’s becoming easier to discern its effects on California.

Here’s an update of what’s happening to the Golden State:

Although 1.4 million active duty military personnel across the U.S. are safe from furloughs, thousands of civilian employees that support the military will go without paychecks. Most of the 8,500 civilian employees at Edwards Air Force base in Lancaster will be furloughed. Also, KPCC is reporting that more than 3,500 civilians supporting the Marine Corps have been furloughed.

Tourists visiting the Joshua Tree or Yosemite National Parks were turned away; 92 Joshua Tree employees are on furlough, and it’s unclear whether or not visitors who made reservations at Yosemite will have their money refunded. Cash-strapped firefighters may also have more trouble cleaning up the Rim Fire, which ravaged tens of thousands of acres of land. The Richard Nixon Presidential Library and Museum in Yorba Linda and portions of the Ronald Reagan Presidential Library and Museum are also shuttered.

Businesses

And the shutdown won’t only affect federal government workers; private businesses that have contracts with the federal government stand to lose money as well. Gary Toebben, president and CEO of the Los Angeles Area Chamber of Commerce, told KPCC that some businesses might not get paid, though most won’t feel any impacts unless the shutdown lasts several weeks (which it might). And, of course, businesses never like uncertainty — and nothing creates uncertainty like a government shutdown.

Previously, CalWatchdog.com discussed where different California lawmakers stand on the shutdown. Those same lawmakers will also be affected by the impasse as well. Many lawmakers have sent some of their staff home, according to the Sacramento Bee. It varies, though. Some offices have kept all employees in place, others have sent plenty home. Congressman Jeff Denham, R-Hawthorne, isn’t taking a paycheck himself.

Bad news for potential felons: Federal courts in California will remain open, the California News Service is reporting. Anyone involved in small changes will find out about them, though major disruptions are expected.

Finally, there might be some good news for anyone having tax trouble. Callers who dial the IRS only get a message: “Due to the current budget situation, all IRS offices are closed.”