Despite promises to conduct a thorough study of a proposal to set a $15.37 minimum wage for hotel workers, some City Council members recently appeared intent on rushing the issue based on a superficial, inconclusive analysis. What's the hurry?
In February, several City Council members proposed an ordinance that would require large hotels in Los Angeles to pay their workers the second-highest minimum wage in the country. (The city already imposes the nation's highest minimum wage; Los Angeles International Airport contractors must pay at least $15.84 as of July 1.) There was understandable concern from the hotel industry, which questioned why it was singled out, and from business leaders, who worried the law would chase investment and tourism dollars outside city boundaries. Those are serious concerns, and they are matched by questions about the wisdom and fairness of raising wages for just one group of workers. In response, the council members' motion called for a study on the citywide economic impacts of requiring a higher wage for hotel workers and said the ordinance would move forward only "if supported by the study."
The study came back, and it was hardly conclusive. According to that analysis, some workers will benefit and spend more money, creating a positive economic impact. Some workers will lose their jobs or lose hours, hotels will be less profitable and some new hotels won't locate in Los Angeles, creating a negative economic impact. The fundamental question remains unanswered: Would raising hotel workers' pay ultimately be good or bad for the city's economy? The study did not say. Nevertheless, the council's Economic Development Committee voted to have the city attorney draft the ordinance, even as it commissioned yet another study to assess the policy's potential affects.
It seems premature at best and cynical at worst to begin writing an ordinance without waiting to learn if the policy is a good one. And in their hurry to act, the proponents have largely ignored the requirements spelled out in the 2007 ordinance that created a living-wage requirement for hotels in the LAX corridor. In order to appease business community concerns, that law said the city could not impose the living wage on other businesses without first consulting three economists on the potential impacts.