Dive Brief:

• Los Angeles City Council members Curren Price and Katy Yaroslavsky introduced a motion to raise the minimum wage to $25 for the city’s hospitality and tourism workers in 2023, and $1 every year after to reach $30 by 2028. They were seconded by Council members Tim McOsker, Heather Hutt, Hugo Soto-Martinez and Marqueece Harris-Dawson. 
• The motion would increase hundreds of workers’ wages — specifically hotel and Los Angeles International Airport employees represented by the SEIU United Service Workers West and Unite Here Local 11 unions — by $9 from the current $16. 
• The announcement caused mixed reactions: Multiple hotel owners’ associations disapproved of the increase, and Unite Here praised the proposal on Twitter, writing it will “ensure [members] are healthy and can afford housing!”

Dive Insight:

Following the announcement, the California Hotel & Lodging Association, Asian American Hotel Owners Association and Hotel Association of Los Angeles released a joint press release calling the proposal “a short-sighted, industry-specific mandate for political gain that ignores accepted living wage policies.” 

The organizations argue the proposed wage increase will be a hardship for LA's hotels, which will be forced to reduce costs, offer fewer services and no longer fund community activities if the motion is passed.  

Laura Lee Blake, president and CEO of AAHOA, commented, “Increasing the minimum wage would be a significant hardship for our family-owned businesses who care deeply about their employees. This $25 minimum wage proposal is a lose-lose situation for all involved.” 

For the LA unionized workers, the proposal feels like a win in an ongoing fight for “fair and decent” wages and benefits. One of those workers is Graciela Gomez, who has worked as a housekeeper at Four Points Sheraton LAX for 23 years. 

Gomez currently makes $20.34 — a wage she fears will not cut it when her rent increases to $1,400 in the coming months. Gomez currently lives paycheck to paycheck as the sole provider for herself and her adult son with schizophrenia. If the proposed wage increase is not passed, Gomez said she and her son will be homeless. 

According to the Massachusetts Institute of Technology Living Wage Calculator, the living wage for an adult caring for one child in the Los Angeles-Long Beach-Anaheim metropolitan area is $44.20 — nearly $25 more than what Gomez currently makes. 

“It’s appalling to think that while the tourism industry has its future growth secured, the workers that keep this major economic engine functioning, safe and profitable are fighting to keep a roof over their heads,” Price said in a Unite Here Local 11 press release obtained by Hotel Dive. 

Unite Here Local 11 Co-President Kurt Petersen said that while the proposed wage increase is a step in the right direction, $25 is not a fair living wage — especially in an industry producing such significant amounts of money. 

We partnered up with @TWRisingLA and @LACityCouncil to introduce a motion to raise the wage for airport and hotel workers in LA to $25/hr to ensure that Angelenos are healthy and can afford housing! #SiSePuede #LivingWage pic.twitter.com/WSYHkArCBm

— UNITE HERE Local 11 (@UNITEHERE11) April 12, 2023

According to Marcus & Millichap research, LA accounted for the fourth-highest number of hotel bookings among major U.S. markets during a 12-month stretch that ended in May, generating $5.3 billion in total revenue for area hotels. These numbers are expected to increase as LA prepares to host global events like the 2026 World Cup and the 2028 Olympics.

“LA's tourism industry thrives on the hard work of its employees. But right now, minimum wage workers must work over 100 hours a week just to afford an apartment in LA,” Yaroslavsky said in the Unite Here Local 11 press release. “It's time to raise the wage and make sure that the people who make Los Angeles a world-class destination can actually afford to live here.”

The LA wage increase was proposed just days after the New York/New Jersey Hotel and Gaming Trades Council reached a deal with 87 local hotels to raise wages by $7.50 per hour for 7,000 of its union members — the largest wage increase in the union’s 100-year history. The deal will increase housekeeper and front desk hourly wages from about $20 an hour to $27 by 2028, and hourly pay for cooks will grow to about $31. 

In addition to the proposed pay increase, the LA motion includes adjusting the healthcare credit to meet the average cost of coverage and adding minimum health benefit requirements such as family coverage. 

“According to an April 2022 report presented by the City's Chief Administrative Office, the [Living Wage Ordinance] health benefits requirement has not kept up with the rising costs of family health insurance coverage,” the motion said. “As a result, many tourism workers and their families, who were among the hardest hit during the pandemic, now lack quality, affordable health insurance.”