Unintended Consequences? Healthcare Facilities Eye Service Cutbacks To Cope With L.A.'s $25/Hr Minimum Wage Hike

L.A.'s new $25 minimum wage certain for healthcare workers appears to leave out workers at unionized facilities.

Last month, due to the influence of the Service Employees International Union’s United Healthcare Workers West (SEIU-UHW), the Los Angeles City Council voted 10-2 to raise the minimum wage for certain healthcare workers to $25 per hour.

However, according to the Los Angeles Times last month, the increases only apply to “privately-owned health facilities in the city including acute-care hospitals, psychiatric hospitals, and clinics or skilled nursing facilities that are part of such hospitals.”

“The wage requirement will cover a wide range of workers, including nurses, aides, housekeepers, guards, janitors and other employees who are not supervisors or managers,” reported the Times.

Minimum wage hikes affect some, but not all healthcare facilities

As the Times noted, the wage hikes do not apply to apply to all healthcare facilities in Los Angeles—namely, community clinics and public health facilities.

Image Source: No On The Unequal Pay Measure Coalition

The effects of passing higher costs onto privately-held healthcare companies now has those private healthcare facilities struggling with how to cope with the increase in their labor costs.

The considerations on how to cope with higher labor costs include service cutbacks, reports the Los Angeles Times.

At Gateways Hospital and Mental Health Center in Echo Park, administrators said they are weighing whether to scale back operations — possibly by as much as 20% — as a way of absorbing the increased costs. That 300-bed psychiatric facility serves a large number of people who are either homeless or at risk of becoming homeless, hospital CEO Phil Wong said in an interview.

In Woodland Hills, the nonprofit Motion Picture and Television Fund is now looking at how to cover a $1.5-million yearly increase in labor costs, according to Bob Beitcher, the fund’s chief executive. That increase is currently set to take effect in August.

Beitcher said some security guards at the motion picture fund’s 300-bed campus, which provides care for seniors who have retired from the entertainment industry, would receive pay increases of 40% to 50%. Some nursing assistants would see pay hikes of 30% to 40%, he said.

“The only way we could absorb that is either to cut back on services, which isn’t something we’d like to do, or fundraise another million and a half [dollars] per year,” he said. [Emphasis added.]

In response to the the mandated $25 minimum wage, a coalition of hospitals and other health facilities launched a campaign on Tuesday to repeal the newly enacted ordinance by gathering signatures for a ballot referendum.

According to the No Unequal Pay coalition’s website, the new $25 minimum wage “completely excludes workers who do the exact same job at public hospitals, clinics, and health care facilities, including all University of California and county hospitals and clinics.”

One point that the coalition does not state, however, is the fact that those “public hospitals, clinics, and health care facilities, including all University of California and county hospitals and clinics” are almost universally unionized.

This means, of course, that private healthcare facilities could be required to pay higher wages to their employees—some of whom may be unionized—while unionized public-sector employees could be paid less than the $25 minimum wage.

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