City Council Approves Living Wage

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Despite objections from the business community and the prospect of a lawsuit, the L.A. City Council voted 9-3 on Tuesday to impose a living wage on airport area hotels.


The vote came two weeks after the Council agreed to rescind a previous living wage ordinance it passed in November. Hotels and business groups had gathered 103,000 signatures to place that original measure on the ballot as a referendum. Rather than let it go to a vote, the Council, mayor’s office, living wage advocates and business leaders reached a compromise in which a replacement ordinance would be drafted to address business concerns.


But the hotels and business groups rejected the revised ordinance that went before the Council on Tuesday, saying it was not substantially different from the original measure.


“It’s the same issue: the Council is still singling out 12 hotels in the city that do not have a business relationship with the city and mandating that they pay a living wage. It’s an intrusion into hotel business practices and it ignores the will of more than 100,000 voters,” said Cindy Boulton, general manager of the Radisson Hotel at Los Angeles Airport.


Nonetheless, the Council passed the ordinance after a two-hour debate. The ordinance must still come back for a second vote on Feb. 20, but since only eight “yes” votes are needed, that is regarded as a formality as is the signature of Mayor Antonio Villaraigosa.


As of Tuesday afternoon, it was unclear whether the hotels and business groups were going to sue the city in an attempt to prevent the living wage ordinance from taking effect, though many viewed it as likely that such a lawsuit would be filed.


Barring a court injunction, the 12 hotels must begin paying their workers the full living wage of $9.39 an hour with health benefits and $10.64 an hour without benefits by July 1, with annual increases pegged to the consumer price index.


Boulton and other business leaders who testified in unity on Tuesday said that the provisions in the new ordinance to phase in the living wage over four months and to suspend the living wage requirement if certain studies are not completed on time are not substantially different enough from the earlier ordinance. They accused the Council of a “bait and switch,” promising to make the new ordinance different but then not doing so.


They were also concerned that the ordinance sets up a framework to enact living wage measures in various areas of the city, setting up a “patchwork” of zones in which all businesses must pay the living wage.


“During the negotiations, the Chamber pressed for an assurance to employers in other industries that their businesses would not be targeted next. Provisions were indeed added to make it more difficult to replicate what happened at LAX. But in the end, our board of directors concluded that these provisions are not strong enough to provide the assurances it needs,” said Gary Toebben, president and chief executive of the Los Angeles Area Chamber of Commerce.


But living wage proponents and supporters on the Council, including Councilwoman Janice Hahn and Council President Eric Garcetti, accused the business community of reneging on their agreement to the compromise.


“It’s very disappointing to me about the absolute betrayal of the business community. We should not have rescinded the original ordinance. But in good faith, we did. They wanted to make sure we didn’t do this again without an agreed upon process. We did that. We gave them business incentives and tax rebates. It’s really an abomination that they then reneged on the deal,” an angry Hahn said.


Hahn and Garcetti also noted that the Council had earlier Tuesday voted to grant more than $60 million in city subsidies to the developers of the $2 billion Grand Avenue project, following a similar grant of about $50 million in subsidies last week to the developers of a major Chinatown project.


“That’s $110 million for business in two weeks. We can hardly be called anti-business after taking actions like that,” Garcetti said.

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Howard Fine
Howard Fine is a 23-year veteran of the Los Angeles Business Journal. He covers stories pertaining to healthcare, biomedicine, energy, engineering, construction, and infrastructure. He has won several awards, including Best Body of Work for a single reporter from the Alliance of Area Business Publishers and Distinguished Journalist of the Year from the Society of Professional Journalists.

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