Los Angeles books higher hotel minimum wage

by James Poulos | October 2, 2014 10:36 am

If critics are right, room service in Los Angeles hotels could descend to that of the Bates Motel.

Yesterday the City Council passed a $15.37 minimum wage for non-unionized employees of large hotels in Los Angeles. Breitbart News reported city observers generally recognized[1] the union-driven plan would boost member rolls because unionized workers’ wages would be regulated by union contracts, not the new law.

Mayor Eric Garcetti said he will sign the hike despite continuing the push for his own more gradual approach[2], which would increase the wage for all workers in the city to $13.25 by 2017.

California’s current minimum wage is $9 an hour, and will rise to $10 in 2016. The U.S. minimum wage is $7.25. So the new Los Angeles hotel minimum wage of $15.37 is more than double the national wage.

Proponents say the higher wage will help employees be able to raise families in an expensive area of the country. In speeches across America[3] backing the higher wage this election season, President Obama has insisted, “America deserves a raise.”

Opponents insist the higher wage will force hotels to cut workers, which in turn would reduce services to guests, or raise room rates. Either move would make Los Angeles less attractive to tourists and the crucial convention clientele.

Opponents hold some hope to overturn the higher wage in court. The American Hotel and Lodging Association filed almost two dozen public records requests to determine how and why the vote sailed through the council with so little time for debate. According[4] to the Los Angeles Times, the ordinance could be thrown out if the City Council rammed through a violation of state and federal equal protection laws.

Bob Amano, executive director of the Hotel Association of Los Angeles, told[5] the Times economic impact reports were shunted aside along with concerns over the discriminatory application of the increase to one segment of workers targeted by unions.

Competing agendas

National organizations have not hesitated to step into the Los Angeles controversy. At a press conference convened after the vote, a combative tone was struck[6] by Katherine Lugar, chief executive of the American Hotel and Lodging Association. “It’s clear that the city council was determined to pass this discriminatory law, regardless of hard data,” she said. Joining the public records request, she continued, would “help illuminate the true motivations behind this rushed decision and whether the proposal itself or the council’s numerous missteps provide grounds for litigation.”

The minimum wage in Los Angeles has become a political football with potentially national implications. That tees up an election-year climate that could serve as a potent distraction for Garcetti, whose approach to city governance has been characterized by more modest, incremental and measured policies than that of activist Democrats.

Damage control

Garcetti also implicity acknowledged the higher minimum wage could reduce jobs. Last month he asked Santa Monica, West Hollywood and other nearby cities to match Los Angeles’ minimum-wage hike to prevent them from taking jobs fleeing his city. He was taking a page from efforts in San Francisco’s East Bay, where a coalition of neighboring mayors is working to coordinate minimum wage hikes.

That has left some groups skeptical. Commenting to the Times, Carol Schatz, chief executive of the Central City Association, warned[7] that “you still have the competitive disadvantage of L.A. versus Orange County or Ventura, or other cities in California.”

Assuming the $15.37 minimum wage passes legal muster and goes into effect, and critics are right that it will kill thousands of jobs, Garcetti’s next step could be to bring back his more modest hike as a jobs-saving compromise.

Whatever happens, Los Angeles is leapfrogging over the city and  country on implementing a much higher minimum wage. It’s a risky experiment where unemployment of 8.1 percent in August[8] remained well above the 7.4 percent for California[9] and 6.1 percent for the United States.

Source URL: https://calwatchdog.com/2014/10/02/los-angeles-books-higher-hotel-minimum-wage/

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