Council committee recommends $15.37 minimum wage for some hotel workers

By ELIZABETH HSING-HUEI CHOU, City News Service
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(AP Photo)

(AP Photo)

LOS ANGELES (CNS) – A proposal to raise the minimum wage to $15.37 an hour for some Los Angeles hotel workers won support from a City Council committee today.

Under the proposal, the higher wage would go into effect for non- unionized hotels with at least 300 rooms by July 1, 2015, while non-union hotels with 125 or more rooms would need to raise their wages by July 1, 2016.

The council’s Economic Development Committee instructed the City Attorney’s Office to prepare an ordinance that will be forwarded to the full City Council for consideration.

The panel also asked city attorneys to include a provision allowing businesses “facing a financial hardship” to seek relief from the minimum wage ordinance.

Hotel owners and representatives of the business community raised concerns during the committee meeting that the proposed wage increase would lead to job losses.

Supporters of the wage increase said the plan would raise the quality of life for many hotel employees living in poverty and stimulate the local economy.

The committee heard from economic consultants who said hotel owners may respond to the wage increase by reducing staff sizes, closing less profitable sites or replacing employees with automated kiosks. A report prepared by Blue Sky Consulting Group found that if hotel proprietors do try to cut costs, any increase in local economic activity stemming from the higher wages of workers “would be minimized.”

The report’s authors added that over the long term, “economic activity could be reduced if investment in new hotels is diminished or capital investments on the part of hotel owners are deferred.”

The report concludes there is an “inherent trade-off” in raising the minimum wage for workers in the hotel industry, in which some employees would see their wages go up, while others would see their jobs disappear.

The California minimum wage is $8 an hour and is set to go to $9 in July and $10 by 2016. Voters in cities such as Long Beach and San Jose have opted in recent years to raise the local minimum wage above the state’s for all or some workers.

San Francisco, which in 2003 pegged its minimum wage to inflation, requires employers to pay workers at least $10.74 an hour.

 

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