As Los Angeles leaders seek to raise the minimum wage for workers in scores of big hotels, critics are questioning whether the city has followed a regulation that requires officials to first cross several hurdles.
Seven years ago, when Los Angeles leaders boosted the minimum wage specifically for hotel workers in the Los Angeles International Airport area, they added requirements for the city to follow before future wage hikes.
The restrictions were meant to address worries from business groups "that our recent action will somehow unleash a flood of other living wage regulations,” and lay out plans for “a considered evaluation” of any future wage boost, then-Mayor Antonio Villaraigosa wrote at the time.
For instance, the resulting ordinance said that before imposing a new “living wage” requirement, the City Council would have to conduct a study on its effects, then hear public testimony about that study “at least two weeks before acting on any living wage proposal.”
This year, city leaders did commission an economic study from an outside consultant on the economic effects of boosting the minimum wage to $15.37 for workers at large hotels. But critics are debating whether the city has satisfied other requirements.
“They need to follow the letter of what was in the ordinance,” said Ruben Gonzalez, senior vice president of the Los Angeles Area Chamber of Commerce. “That was definitely the promise made ... and that has not occurred.”
Critics and supporters of the minimum wage boost disagree on how to interpret the rules and what they require. As of Monday afternoon, aides to City Atty. Mike Feuer had not answered emailed questions from the Los Angeles Times about the earlier ordinance and whether it required the city to take any added steps.
Part of the ordinance said that if the industry being targeted for a wage hike was so large that low wages could affect the entire Los Angeles economy, the Council would seek a written report from a panel of three economists -- including one chosen by the Chamber and one chosen by the Los Angeles County Federation of Labor. That group would then determine if the number of workers being paid poorly was big enough to affect the city economy.
Gonzalez said such a study of the current wage proposal had not been pursued and still needs to occur. Others disagreed, pointing to another section of the rules that said the targeted industry must get business benefits from a city asset that “match or exceed” the benefit that hotels surrounding LAX receive from being near the airport.
James Elmendorf, deputy director of the Los Angeles Alliance for a New Economy, said that he thought hotels met that bar, because “the tourism industry has received significant investment from the city of Los Angeles.” He said the rules were worded so that the city only had to meet some of the listed requirements -- which he believed it already had done.
Opponents “are going to look for reasons to oppose this,” Elmendorf said of the criticism. The city should “support hotel workers in raising the standard and addressing poverty in our city.”
Valley Industry and Commerce Assn. president Stuart Waldman said he was frustrated at the reaction he had gotten from city lawmakers when he brought up the requirements of the earlier ordinance.
“This council is saying that deal was made with the last council, not this council,” said Waldman, an opponent of the minimum wage increase. If lawmakers take that stand, he said, “people have to question whether to make agreements with them anymore.”
The proposed wage increase would go into effect next July for hotels with at least 300 rooms, and take effect a year later for smaller hotels with at least 125 rooms. The proposed ordinance would also include a “hardship waiver” for hotels that face severe financial challenges paying the increased wages.
Labor groups and other backers of the plan argue that ramping up wages in big, non-unionized hotels would give a boost to the Los Angeles economy and steer families away from poverty. The Hotel Assn. of Los Angeles and other key business groups say it would force hotels to slash jobs and services.
A Council committee pressed forward with the plan last week, asking city staffers to draft the ordinance for the entire council to consider.
Councilman Curren Price argued that the wage increase would give Los Angeles a chance to set the example for the nation as “a progressive leader.”
Follow @latimesemily for what’s happening at Los Angeles City Hall