Members of the hotel worker union celebrate a contract victory in 2010EXPAND
Members of the hotel worker union celebrate a contract victory in 2010

L.A. Hotel Workers May Get Huge Pay Increase to $15.37

Updated below: City Council voted 12-3 to approve the new minimum wage for hotel workers; it will still need another vote next week.

The Los Angeles City Council is set to vote today on what could be a huge windfall for hotel workers, raising their minimum wage to the oddly specific $15.37 an hour. 

But a number of business groups, including the L.A. Chamber of Commerce, the Central City Association, and the Valley Industry and Commerce Association (or VICA) oppose the proposal, saying it will hurt hotels and many of their employees. In a letter to the city council, the coalition hinted at legal action should the politicians approve the new law. 

Now, if it feels like only last month our very own Mayor Eric Garcetti was talking about a minimum wage of $13.25, well that's because it was only last month. That proposal is still in the making, and hasn't been sent to the 15-member city council. But the council has now leapfrogged the young mayor, and the $15.37 came down the pike awfully fast.

"They’re really ramming it down our throats," says VICA president Stuart Waldman. 
Nevertheless, Garcetti told the Los Angeles Times that he would support the hotel-worker raise if the council passed it. 

That appears likely – the Los Angeles City Council is very cozy with labor unions. And Maria Elena Durazo, the head of the County Federation of Labor and perhaps the most influential non-elected official in the city, used to be the chief of the hotel workers' union, known as HERE local 11.

Let's just say Durazo's ideas get special attention in City Hall (and she appears to have buried the hatchet with Garcetti, whom she opposed in the election). 

Durazo was the first to speak yesterday at a meeting of the City Council's five-person Economic Development Committee, counsel members Curren Price, Nury Martinez, Gil Cedillo and Jose Huizar approved the unusually fast-moving ordinance for consideration today by the full city council. 

"Hotel workers are here today because with $15.37 an hour they can provide for their families," Durazo said, according to KPCC's Alice Walton. "When they can provide basic living needs for their families, they’re going to also spend that in their local communities. That’s good for all Angelenos."

But there's a special clause in the proposal: hotels are exempt from the minimum wage if they allow their staffers to unionize.

"Let’s be honest, this is about union membership recruitment," says Waldman. "If this was truly about the minimum wage, they would set the $15.37 as the floor no one can go below it, whether they're in the union or not."

The city council enacted a similar motion in 2006, affecting only hotels along the Century Boulevard corridor near LAX. The ordinance said that hotels near the airport had to pay employees $10.64 – unless the employees were unionized. 

Many of the hotels chose to raise employee wages to avoid dealing with labor unions. 

Since then, the hotels themselves have done fine, according to economist Chris Thornberg, a founding partner at Beacon Economics. However, he says, the number of jobs at those hotels have dropped by roughly 10 percent since 2006, while hotel employment in the entirety of Los Angeles County is up 12 percent during the same period.

That's a 22 point difference.

What happened, explains, Thornberg, is that LAX-area hotels inside the wage-hike zone stopped offering, or cut back on offering, such services as banquets and closed down some restaurants — since they were competing against restaurants that aren't within the zone. 

Thornberg spoke at the City Council's Economic Development Committee hearing yesterday, and found himself getting more and more frustrated with the proceedings. 

"They’re going on and on about a poor Latina of color, about how she has to work three jobs and never gets to see her kids," says Thornberg. "She’s gonna have lots of time to see her kids when she get laid off, OK bozo? It’s so obvious what the impact has been. They just don’t care."

City Councilman Curren Price, who co-authored the measure, disputes those numbers about unemployment — different economists give different figures.

But he concedes that some hotel employees could lose their jobs. 

"There may be some job losses, but it’s also important to increase the wages of those that are working," says Price. "Ultimately, it’s a policy decision. It’s difficult. It’s not easy, and it’s not a formula. To a certain extent, it’s on a guy feeling."

Price says the measure is about fairness, since the Los Angeles hotel industry has benefited from tens of millions of dollars in tax breaks, as well as public investment in transportation and other infrastructure. "I think it’s only fair that we help the workers too," he says. 

To which Thornberg retorts that elected officials "shouldn’t have been giving all the money to the hotels. I find that just as obnoxious."

Update, 12:40 PM: City Council just voted to approve the new minimum wage for hotel workers, 12-3. The dissenting votes were Councilmen Bernard Parks, Mitch Englander and Paul Krekorian. Because of City Council's weird rules, it will have to vote again next week, on October 1, to officially pass the measure. 

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