Living wage law may expand in L.A.

The proposal: a first-of-its-kind expansion of the city’s decade-old living wage ordinance to hotels near Los Angeles International Airport.

The setting: a nearly full City Council chamber.

On one side of the aisle were powerful business leaders, half a dozen top lobbyists, current and former heads of various chambers of commerce, and hotel managers, nearly all of them dressed in suits and ties.

On the other side were several dozen workers from those same hotels, many of whom toil for minimum wage plus any tips they get. For the most part, they wore short-sleeve shirts and jeans.

A contentious hearing ensued, but both sides of the room were sure of the outcome: The suits didn’t stand a chance.

The City Council is poised this week to grant the wish of the hotel workers, and for the first time apply the city’s living wage ordinance to private companies that have no business relationship with the local government. Mayor Antonio Villaraigosa has indicated his support.

Privately, both labor and business representatives say the ordinance is all but certain to pass. And that expansion of living wage -- which had previously required only companies that contract with the city to pay a set wage, now $10.64 an hour -- shows the extent to which labor and its interests dominate the agenda of city government, as well as the huge growth of that influence in recent years.

It was during former Mayor Richard Riordan’s time in office that labor first pressed its living wage agenda, which in those years was confined to requiring large companies to pay a minimum wage in return for city business.

In the hotel debate, however, the City Council is preparing to assert its right to set pay for companies merely because they operate inside city limits, not because they seek money or leases from the government. That represents a vastly different proposition, and the ease with which it has slid through early discussions in city government offers vivid evidence of labor’s strength.

“To be frank, organized labor owns the City Council,” said attorney David Fleming, incoming chairman of the Los Angeles Area Chamber of Commerce. “It seems that anything organized labor wants, the City Council rushes to provide them immediately.”

Fleming acknowledged that labor’s advantage in this matter is the result of superior organization by unions. Labor and labor-backed organizations have spent a year building a coalition of support for the legislation.

Dozens of pastors with airport-area congregations have been recruited, and even local teachers and school principals have spoken out in favor.

This effort is part of a larger campaign by a hotel workers union to organize employees at these same airport hotels.

In turn, the airport hotels in Los Angeles are a top target of a national hotel-worker organizing campaign in 10 cities, including San Francisco and Sacramento.

The hotels have maintained that they welcome unionization as long as workers choose to join unions in secret elections. Union officials say hotel officials are being disingenuous and would use elections as an opportunity to delay union recognition and intimidate workers.

In the unionizing fight, the living wage ordinance is a way to pressure the hotels on political and public relations fronts.

“Once you pass these living wage ordinances, you remove many of the incentives to fight unionization,” said Nelson Lichtenstein, a UC Santa Barbara professor who is widely considered one of the country’s leading labor historians.

Union leaders have offered carrots to the hotels, saying they would like to use their political sway to push the city to boost business in the airport area, possibly with the addition of a conference center. But business leaders and hotel officials rejected those advances, declining to attend City Council hearings earlier this year to examine working conditions in the Century Boulevard corridor. Instead, labor moved with quiet effectiveness to build an alternative strategy.

Some business leaders seemed to have ignored the new living wage legislation until it was too late. Fleming, the incoming chairman of the chamber, said he learned of it in mid-October while traveling with Villaraigosa on a trade mission in China.

“It kind of caught us by surprise,” he said. “This is toxic when it comes to the business community.... We’re going to be told by the city government how much wages we have to pay. This is dangerous.”

The hotels began a belated counterattack only last month by hiring top lobbyists and power brokers such as George Kieffer, a leading lawyer who helped write the City Charter. By the time Kieffer signed on, however, labor had commitments from a majority of the City Council.

Faced with likely defeat at the council, Fleming said he aired his concerns with Villaraigosa, telling the mayor that the living wage effort had to be “quarantined” to the airport area to prevent its spread citywide. Although he is a former union organizer and an unlikely business ally, Villaraigosa agreed, overruling some of his senior advisors who counseled him to stay out of the fray and leave the quarrel in the hands of the City Council.

Instead, Villaraigosa announced support for the living wage effort but asked for a two-week delay before a vote so business interests could weigh in. The council agreed to wait one week. The vote is scheduled for Wednesday.

“I believe that you can have a strong economy and invest in the employees as well,” Villaraigosa said in an interview. “We should honor work and give people a decent wage.”

In addition to the living wage, the council is to vote on measures that would require hotels to retain employees for 90 days after ownership changes and that would guarantee that the service charges collected at hotel banquets actually end up in the pockets of the workers who provide the service.

Business and labor officials agree that the living wage measure is the heart of the package -- and the latest example of a national labor effort to focus on low-income workers. Beginning with a law in Baltimore in 1994, more than 120 cities around the country have adopted living wage laws that apply to employers that receive government contracts or financial incentives.

In half a dozen cities, the law covers employers without that direct financial tie to the government; such laws have faced legal challenges, with labor winning the courtroom battles to date.

In 2000, Berkeley required private businesses that operate in its marina to pay a living wage. Last year, voters in Emeryville established a living wage for workers at hotels with more than 50 rooms. Santa Fe, N.M.; Albuquerque; San Francisco; and Washington, D.C., all have established minimum wages that apply to employers throughout the city.

“It’s pushing the envelope,” said UCLA professor Ruth Milkman, author of “L.A. Story: Immigrant Workers and the Future of the Labor Movement.” “But people in a number of places are trying to do the same thing.”

Business leaders say such laws reduce the number of jobs, and labor officials contend that they help lift people out of poverty. But serious academic studies suggest that most claims about the benefits and costs of such laws are vastly overstated.

A 2005 study of the Los Angeles current law by researchers at the University of California and a labor-backed research group found that the law affected the wages of fewer than 10,000 workers, most of them adults who worked inside the Los Angeles or Ontario airports.

Eighty-one percent of the businesses affected saw no job losses. Most employers recovered the costs through reduced turnover, cuts in benefits and overtime, cutting profits or passing on costs to the city or the public.

About 3,500 people work in the hotels covered by the proposed ordinance, and many of them already earn more than $10.64 an hour. To many who work there, the living wage seems like a minor measure.

Manuel Alvarez, 60, who emigrated more than two decades ago from Michoacan, Mexico, makes $9.95 per hour as a janitor after 11 years at the LAX Hilton. His $1,250 monthly rent eats up well more than half of his income.

“It would help, but the new law is not enough,” Alvarez said in Spanish. “We need the union. That would be the victory.”

The hotel workers who attended Wednesday’s hearing cheered each time a councilman spoke for their position.

“Don’t be afraid of a living wage, “ Councilman Bill Rosendahl, whose district includes LAX, said to the side of the room where business leaders sat. “I understand your feeling about meddling in your affairs, but we as a city have a responsibility to all the people in the region to see that this is fairly done.”

Among the few labor skeptics on the City Council was Greig Smith, who insisted that the city was wrong to use its “police powers” to interfere with decisions best left to the private sector. “This is not the American way of business,” he complained.

But Smith is part of a dwindling minority of labor skeptics on the City Council. Councilwoman Janice Hahn, who introduced the legislation and has participated in protests outside the hotels, sounded confident of victory. “This is a bold step,” she said, “and I think we can send a message that in Los Angeles, it’s the voice of the workers who count.”

joe.mathews@latimes.com duke.helfand@latimes.com

Times staff writer Steve Hymon contributed to this report.