The drive to boost minimum wages in Los Angeles could reach a milestone this week as the City Council votes on a proposal to raise the hourly pay of thousands of workers at big hotels to at least $15.37.
That would be more than $2 an hour higher than the minimum wage Mayor Eric Garcetti is advocating for workers citywide.
Labor groups are rallying behind the plan now before lawmakers, saying that it could pull hotel workers’ families out of poverty and inject more spending into the local economy. Several council members favor the increase, including Councilman Curren Price, who said it would make Los Angeles “a progressive leader” for the nation.
Some business groups warn that hotels could be forced to cut jobs if the plan passes. They cited a city-requested report released Monday that said hotel developers will bypass Los Angeles if the ordinance is approved.
“We believe that if the proposed ordinance is implemented ... any new hotel development will take place outside of the city limits,” said the report prepared by hotel industry analyst PKF Consulting.
Garcetti has said that he will sign the law increasing the minimum wage for hotel workers if the council approves it. A vote is scheduled Wednesday. In addition, the mayor recently proposed gradually increasing the minimum wage for all Los Angeles workers to $13.25 by 2017, with increases after that tied to an inflation index.
James Crank, owner of the Beverly Garland Hotel in North Hollywood, said his business can probably absorb the Garcetti wage increase. But if the city requires him to pay his workers $15.37 an hour, he said, the Beverly Garland would either cut its staff significantly or possibly give the hotel “back to the bank.”
“I really don’t know if we as a business could make it,” he said.
Backers of the plan cite a separate Economic Roundtable study, also requested by the city, which found the financial performance of hotels near LAX didn’t suffer after the city raised minimum wage requirements there in 2007.
James Elmendorf, deputy director of the Los Angeles Alliance for a New Economy, said Los Angeles’ overall hospitality sector has fared much better than other parts of the city economy.
“It’s done incredibly well, in part because of the natural advantages of the city and Southern California,” said Elmendorf, whose advocacy group focuses on labor and environmental issues — and is pushing for the higher hotel wage. “It’s also benefited from significant subsidies the city has provided.”
Thousands of Los Angeles hotel workers earn less than $15.37 an hour, with wages averaging $9 for housekeepers, $11 for clerks and $12 for bellhops, according to another Economic Roundtable report underwritten by Elmendorf’s group.
In Compton, Sandra Diaz wakes up at 4:30 a.m. daily to get to her job busing tables at a hotel near LAX. In the afternoon, she heads to a second job at another hotel, where she works as banquet server, sometimes leaving work as late as midnight. Sleep is scarce and her rent keeps climbing, she said. She and her husband, who works as a hotel cook, support her aging parents and their baby son, she said.
The higher wages that the couple would collect under the City Hall proposal could free her to spend more time with her son.
“We need it,” Diaz said. “We work very hard.”
City Council President Herb Wesson, partly in response to business community concerns, asked three economists to report on how lower wages in the hotel industry are affecting the Los Angeles economy, among other questions. Critics of the wage increase say that lawmakers haven’t allowed adequate time to review the reports, one of which was not released until late Monday afternoon.
Council members “haven’t had a chance to read or digest the reports,” said Carol Schatz, president and chief executive of the Central City Assn., a business group. “How can they make a major policy decision without looking at all the economic information they asked for?”
Schatz said her group was considering legal action to block the proposed hotel wage increase if it is approved.
Elmendorf argued that months had passed since the hotel wage increase plan was proposed, giving lawmakers, business groups and the public plenty of time to consider the idea.
“At every stage of this, opponents say, ‘We need more time,’ ” he said.