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LA City Council committee approves $15 an hour for hotel workers

L.A.'s Mayfair Hotel is one of the businesses that would be affected by a proposed $15/hour minimum wage for its non-union employees.
L.A.'s Mayfair Hotel is one of the businesses that would be affected by a proposed $15/hour minimum wage for its non-union employees.
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Non-unionized hotel workers in the City of Los Angeles would be paid $15 an hour under a proposal supported Tuesday by members of the city council's Economic Development Committee. 

The approval came despite a consultant's report that found increasing the minimum wage for those employees could cost some workers their jobs and decrease the value of hotels throughout Los Angeles. Committee members also voted to draft the new city ordinance without first conducting an analysis on the economic impact to hotels and workers.

At the request of Councilman Paul Krekorian, an economic analysis will be completed before the wage proposal takes effect — if it is passed by the full council. 

"We're all elected to improve the quality of life of people we represent," said Krekorian, "but honestly, as I sit here, I still don't know whether this measure does that.

"It does for some, but I also know that I'm going to hurt some by voting for this. I'm going to put people out of work by voting for this. I'm going to cause other people to lose income because of this and I don't know whether it's a net plus or not."

Under the proposal, hotels with at least 300 rooms will have to pay their workers $15.37 an hour beginning July 1, 2015. Hotels with 125 rooms or more would see the wage increase take effect one year later.

The head of the Los Angeles County Federation of Labor supported the measure, arguing that as hotels financially succeed, so too should their employees. 

"We can't go by that trickle-down theory any more because it just doesn't work," said Maria Elena Durazo. "We need those workers to do better for themselves, their families and our community." 

A report from Blue Sky Consulting found the higher wages would give hotel employees greater purchasing power. However, that added expense could prompt hotel owners to lay off workers or invest less money in their properties. 

"There's benefits to workers that get a raise and keep their jobs," said Matt Newsman of Blue Sky Consulting. "But the cost of that benefit is borne by some workers who would lose their  jobs and by hotel owners who would suffer a reduction in their profits." 

"If this ordinance passes, the cost to our small family-owned hotel would result in us having no choice but to reduce our staff," said Mark Sokol, owner of the Erwin Hotel in Venice.

"We would have to cut 15-to-20 percent of our employees. We can't raise room rates because we wouldn't be competitive with small hotels in neighboring cities like Santa Monica and Marina del Rey.  

The average hotel employee in a non-union shop makes $10.55 an hour, according to the Los Angeles Alliance for a New Economy. A spokeswoman for Councilman Curren Price, chair of the Economic Development Committee, said data from the U.S. Census show 43 percent of hotel workers in Los Angeles County live below the federal poverty line. 

Price's office estimates about 40 hotels would be affected. The city already requires a "living wage" for hotel workers near LAX. The rationale for the wage proposal there was that hotels benefit from the airport, which is a city-owned asset. Similarly, council members say that because tourists flock to Los Angeles for its public parks, beaches and attractions such as Hollywood Boulevard, the city can require hotels to pay their workers beyond the state's minimum wage, which rises to $9/hour in July. 

The City Attorney's Office was directed to draft the ordinance and then send it to the Los Angeles City Council for approval. Mayor Eric Garcetti will sign the wage ordinance if it is approved by the council, according to one of his spokesman.