Push to boost wages at big LA hotels

City council to consider proposal to raise hourly rate to $15.37, which would be among nation's highest if passed

Hotel workers protest against the Hyatt Hotel chain on July 22, 2010 in West Hollywood, a city adjacent to Los Angeles.
Mark Ralston/AFP/Getty Images

Three Los Angeles City Council members have launched a bid to nearly double the minimum wage for hotel workers to $15.37 an hour, among the highest proposed minimums nationwide.

The living wage proposal, applicable to about 11,000 workers employed by Los Angeles hotels with more than 100 rooms, would help to lift employees out of poverty and benefit the city economy, proposal supporters said on Tuesday when the proposal was introduced.

California’s minimum wage is $8 an hour with a $1 bump coming in July. It will reach $10 in 2016. Cities and counties can set a higher minimum wage. In San Francisco, for example, the minimum is $10.74 with annual cost of living increases. Nationwide, a number of cities have adopted or are considering minimum wage proposals, including a citywide $15-per-hour rate urged by Seattle Mayor Ed Murray.

The Los Angeles measure comes as President Barack Obama pushes Congress to raise the federal minimum wage to $10.10 an hour, from $7.25, following enactment of higher minimum wages by nearly half of all states and the District of Columbia. The issue promises to be hotly contended during the election year. The Congressional Budget Office said Tuesday gradually raising the minimum from $7.25 hourly to $10.10 would lift 900,000 people above the federal poverty level by 2016 but there would be about 0.3 percent fewer jobs, higher costs for business owners and higher prices for consumers. More than 10 states raised the minimum wage on Jan. 1.

The Los Angeles hotel sector immediately voiced opposition to the proposed wage hike, saying it unfairly singles out one industry for mandatory pay rises and that some hotels would probably scale back operations or the number of workers they hire.

Los Angeles law requires the economic consequences of such a proposal to undergo a review by the city's legislative analyst before a formal ordinance can be drafted.

Three council members — Mike Bonin, Nury Martinez and Curren Price, representing the city's affluent Westside, the San Fernando Valley and downtown, respectively — introduced a motion on calling for a study of the issue.

They pointed to city Economic Development Department findings that 43 percent of hotel workers in Los Angeles earn wages that leave them far below the federal poverty line, which has been a drag on the city's economic recovery.

According to Economic Policy Institute research cited by living-wage backers, Los Angeles stands to gain more than $70 million in economic activity from raising the pay of hotel workers, giving them more disposable income to spend.

"Study after study tells us that poverty, unemployment, and income disparity are plaguing Los Angeles," said Price, who chairs the Economic Development Committee, which will vote next week on the motion for a study.

"The folks who are going to be earning these additional wages aren't going to be investing them on Wall Street," Price said. "They're going to be getting groceries and shoes and furniture, their tires repaired."

He and other sponsors also argued that public investment in tourist attractions such as Hollywood Boulevard, Venice Beach and the Convention Center, as well as in transportation infrastructure, has benefited hotel owners.

According to their motion, L.A.'s hospitality industry has posted three consecutive years of growth, with an occupancy rate topping 75 percent, well above the national average of 62 percent, and a "revenue per room available" rate of $100 — a 12-year high.

"Unfortunately, too many hotel workers have been left behind, especially women that are the majority of hotel housekeepers," Martinez said.

Bob Amano, executive director of the Hotel Association of Los Angeles, said the move to raise hotels' minimum wage citywide reneges on an understanding reached in 2007, when a living wage measure was adopted for workers in hotels in the immediate vicinity of Los Angeles International Airport.

Those workers are now paid a minimum of $15.37 an hour, the basis of the wage floor now proposed citywide by Bonin, Martinez and Price.

But Amano said the industry was led to believe then that the higher minimum rate for LAX-area hotel workers would not be expanded citywide except under stringent conditions that he argued have not been met. Those include showing that hotels elsewhere have benefited from the same level of public investment as those in the LAX corridor.

Reuters and Al Jazeera

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