LOS ANGELES (Reuters) - Three Los Angeles City Council members have launched a bid to nearly double the minimum wage for hotel workers in the U.S.’s second-largest metropolis to $15.37 an hour, among the highest rates proposed for any of the country’s private-sector workers.
The “living wage” proposal would apply to about 11,000 workers at hotels in Los Angeles with more than 100 rooms, helping to lift employees out of poverty and spur the city economy, supporters of the proposal said.
The hotel sector immediately voiced opposition to the proposed wage hike, saying it unfairly singles out one industry for mandatory pay rises and would likely force some hotels to scale back operations or the number of workers they hire.
Employers in other sectors and hotel owners in neighboring jurisdictions are generally required to pay their workers no more than $8 an hour, the current state minimum wage in California which is set to rise to $9 this summer.
The debate 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.
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 and a $12.16 hourly rate previously approved for anyone working under a municipal contract in Los Angeles.
City 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 Tuesday 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.
Reporting by Steve Gorman, additional reporting in Seattle by Bryan Cohen; editing by Dan Whitcomb and G Crosse