Minimum Wage Hike Approved for Hotels in Los Angeles Despite Jobs Loss Warnings

The Los Angeles City Council voted 12 to 3 on Wednesday to impose a minimum wage hike on large hotels to pay $15.37 an hour to employees. 

The move was deemed a huge victory for organized labor and unions, despite warnings by analysts that the increase will likely result in job losses from California’s Harbor Gateway to the San Fernando Valley.

“Because of the size and prominence of the hotel industry here in Los Angeles, I do believe that this will have national reverberations,” said Kent Wong of UCLA’s Center for Labor Research and Education, according to the Los Angeles Times.

Wednesday’s decision is merely a preview of an even larger, sweeping pay proposal being championed by Los Angeles Mayor Eric Garcetti, who seeks an incremental pay hike in L.A.’s minimum wage to $13.25 per hour by the year 2017.

Both advocates and opponents of the measure convened to present their arguments in front of the city council. 

“It is not OK for families… working in this thriving industry to not see their children before they go to bed,” said Councilwoman Nury Martinez, who represents the central San Fernando Valley. She said that the increase would pull families out of poverty and help them gain more stability by eliminating the need for a second job, notes the Times. 

Those who were opposed to the measure cited a different line of reasoning. “Today a whole bunch of people in the hotel industry lost their jobs; they just don’t know it yet,” said Ruben Gonzalez, senior vice president with the Los Angeles Area Chamber of Commerce, according to the Times. 

Christopher Thornberg, who is a founding partner at Beacon Economies, produced one of several studies that were presented to the council detailing the vast economic effects the minimum wage increase would have. Despite the fact that his firm will reportedly be paid up to $20,000 for their research and analysis surrounding the hike, Thornberg was reportedly only given 60 seconds from Council President Herb Wesson to testify and was cut off by Wesson just as he was providing statistics on job losses at LAX hotels, notes the Times: 

They kept going back to the idea of this low-income Hispanic woman working two jobs who doesn’t have enough time to spend with her kids. Well, she’s going to have a lot more time to spend with her kids when she doesn’t have a job.

A vast number of those who both supported and opposed the minimum wage hike agreed on one thing: that the wage increase is not to improve wages, but rather to expand the ranks of the UNITE HERE Local 11, a union that represents hotel employees.

Wednesday’s vote was the city council’s most weighty move to increase wages in the private sector since 2007, note the Times. During that year, lawmakers passed legislation to increase the base pay of employees at 12 hotels near LAX. However, in the end, that move resulted in job losses with the decrease of overall hospitality jobs. 

Thornberg noted that while employment at hotels across L.A. County grew by a 10% margin during the six-year period that followed the 2007 hike, the number of actual jobs at LAX also dropped by 10%. “There’d be 400 more people employed by the hotels in the airport area” if the previous wage boost hadn’t happened, he said.

Mayor Garcetti has stated that he intends to sign the hotel wage plan. A second procedural vote is reportedly expected next week due to the fact that the vote was not unanimous. The Times notes that the three councilmen who voted against the measure were Paul Krekorian, Mitchell Englander and Bernard C. Parks.

“At the end of the day, between the intellect and the heart, the heart wins out,” said Councilman Mitch O’Farrell, who represents part of Hollywood. He had voted in support of the hike.