The Los Angeles City Council is, again, trying to rush through a proposal to establish a special $15.37-an-hour minimum wage just for hotel workers. A committee hearing has been scheduled for Tuesday and a full council vote is expected the following day, even though three reports from economists on the potential impacts of the proposal were only due Monday. What? You expected council members to actually read and digest the economic analysis before making a major decision?
That was never going to happen. It's been clear for months that the proponents of the wage on the council have no desire to have a real debate on the merits of raising pay just for hotel workers. Instead, they've ignored unfavorable economic studies, tuned out valid industry concerns and overridden their own existing laws in an effort to enact what is in fact bad public policy.
Under the proposal, large hotels in Los Angeles would be required to pay their workers the second-highest base wage in the country — 70% above the state minimum wage. Is that reasonable? Is it fair? Will it dissuade hotels from locating inside the city limits? Will hotels pass the cost on to guests, or will they cut back jobs? There has not been an adequate debate on these issues, but the proposal is moving full steam ahead, even though Mayor Eric Garcetti recently proposed a far better alternative, which would gradually raise the minimum wage for all workers in the city to $13.25 an hour in 2017.
Proponents of the hotel wage proposal, including the powerful Los Angeles County Federation of Labor, have never offered a compelling reason why the government should single out one industry for special treatment, creating a situation in which a dishwasher at a large hotel would earn $15.37 an hour next July while a dishwasher at a restaurant next door could still be paid as little as $9 an hour. Instead, they've offered the flimsy justification that the tourism industry benefits from L.A.'s public attractions and therefore the city can impose a higher wage on hotels. If so, what businesses will be the next target of City Hall? Ice cream parlors near city parks? Tire shops near potholes?
It is hard to see why any company would open up shop in L.A. if it might be subjected at any time to the whims of the city's political leadership. This should be a big concern for Garcetti, who has made job creation his top priority and who has repeatedly declared that L.A. is "open for business." But he announced in January — before the hotel worker proposal was even released, much less studied — that he would sign the ordinance. That's a shame. Garcetti would do better to urge his colleagues to reject random, industry-specific wage hikes and instead dedicate their energies to raising the minimum wage gradually and across the board, and to working with him on developing a larger strategy for economic development.