Thousands of hotel employees in Los Angeles could see their hourly wages increase to $15 next summer under a proposal approved Tuesday by an L.A. City Council committee.
The Economic Development Committee listened to an hour of public testimony as well as the findings of three economists before agreeing to set a new minimum wage for the city's hotel industry. The hourly wage of $15.37 would take effect on July 1, 2015 for hotels with 300 rooms or more. Smaller hotels, with at least 150 rooms, would be impacted beginning in 2016.
The full city council is scheduled to vote on the wage law on Wednesday.
"Hotel workers are here today because with $15.37 an hour they can provide for their families. 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," said the county Federation of Labor's Maria Elena Durazo, who has long supported the policy.
The wage proposal comes as Mayor Eric Garcetti is building support for a citywide minimum wage of $13.25 by 2017. Though he announced his wage plan on Labor Day, Garcetti's office has not yet submitted a formal proposal to the city council.
The wage increase for hotel workers was opposed by pro-business groups and trade associations. An attorney representing the California Hotel & Lodging Association, the Hotel Association of Los Angeles, the Chamber of Commerce, Central City Association and Valley Industry & Commerce Association argued the new proposal violates an earlier agreement to increase wages at hotels near LAX.
"The proposed ordinance not only violates the city's commitment to procedural fairness and the consensus between labor and business set forth in the existing ordinance, it appears to violate constitutionally guaranteed rights and create legal causes of actions," attorney Paul Rohrer wrote in a letter to the city council.
Seven years ago, the city created a "living wage" for hotel employees near LAX. An economist with PKF Consulting testified before the committee that that ordinance led to job losses as hotel operators struggled to pay higher wages while maintaining low room rates.
"The ordinance does not impact occupancy or room rate as much as impacts the level of services that hotels are willing to give or able to give to their customers, and the number of employees they're able to hire," said economist Bruce Baltin with PKF Consulting.