Los Angeles Business Journal

Wage Creep

By Charles Crumpley Monday, February 10, 2014

Regardless of where you stand on the living-wage issue in Los Angeles, you’ve got to admit this: Living-wage proponents have a terrific strategy.

The eventual goal of labor interests is to impose a citywide living wage (which now is more than $15 an hour, almost double the minimum wage). But if they push for that aggressively and quickly, they risk coming off as overreaching and could lose, perhaps at the ballot box. Instead, they’ve devised a clever strategy of incrementalism.

First, labor interests got their allies on the Los Angeles City Council in 2006 to pass an ordinance forcing the hotels on Century Boulevard near Los Angeles International Airport to pay their workers a living wage. Their rationale: Those hotels benefit greatly by being near the airport, a city-owned facility. Therefore, the city had the right to impose a living-wage rate.

There was opposition, sure, but it was muted. After all, the target group was small and the rationale was, well, at least somewhat rational. Winning that airport-area battle was a classic camel’s-nose-in-the-tent victory for labor.

After a hiatus for the recession, labor now is ready to take the next step. They’re working toward an ordinance that reportedly would force big hotels (those with 100 rooms or more) to pay their workers a living wage – but only if the hotels are not unionized.

Los Angeles has 87 hotels with 100 or more rooms, but about 40 percent are unionized. So we’re talking about a little more than 50 hotels that would be affected. Again, labor has targeted a small group to fight in its strategy of incrementalism.

But what’s even more clever is this: There will be a fight, sure, but small hotels and big unionized hotels will be tempted not to join in but to sit down and dummy up. After all, they wouldn’t mind seeing their competitors saddled with much higher labor costs. In the coming fight, labor interests have split their opposition.

And it was no accident that labor chose the hotel industry as the battleground for its living-wage movement. Why? Because the usual opposition points aren’t as sharp. For example, one standard argument against raising minimum wages is that they’re mostly paid to students with after-school part-time jobs or to entry-level workers who quickly move on. But that’s not so true in the hospitality industry, where many housekeepers and bellhops are full-time career workers who really do depend on their paychecks to support a family.


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