A Los Angeles city panel signed off on a plan Tuesday to raise the minimum wage at some Los Angeles-based hotels, despite warnings from an outside consulting group that workers may be laid off and hotels could be hurt economically.
Following the example of cities like Seattle, which recently raised the minimum wage across the board, the city’s Economic Development Committee moved to raise wages to $15.37 for workers at larger Los Angeles hotels. The current state minium wage is $8.
Under the proposal, which still needs approval from the full City Council, the higher wage would go into effect for Los Angeles hotels with 300 rooms or more by July 1, 2015. Operators of hotels with 125 or more rooms would need to raise wages by July 1, 2016.
Businesses who apply and qualify for “financial hardship” could seek relief from the new ordinance.
The new law has the backing of L.A. union leaders, but it is opposed by many hotel operators and business groups.
South L.A. and downtown City Councilman Curren Price, who benefited from hundreds of thousands of dollars in outside labor support during his council bid last year, spearheaded the motion at Tuesday’s meeting. He spoke about the working poor in his own district, telling his colleagues that Los Angeles has an opportunity to set “an example for the nation.”
An outside consulting report released this month said the proposal would raise wages for some workers, but there was no guarantee that money would flow back into Los Angeles’ economy, since hotel workers may not live in the city.
Some larger hotels are likely to see negative economic impacts, the report found. If forced to pay higher wages, hotels may lay off employees or cut back on facility renovations. Or, they may choose to leave Los Angeles, the report concluded.
Several hotel representatives spoke out against the law at Tuesday’s hearing, including Alexander Moradi, a co-owner of the Mayfair Hotel in downtown Los Angeles, who warned the panel that his hotel may convert to another use if the ordinance passes.
Stuart Waldman, president of the business group the Valley Industry and Commerce Association, warned that layoffs and reduced hours for existing employees would occur if the law passes.
“We urge you to reconsider this wage hike and instead focus on policies that spur economic development without jeopardizing existing jobs and existing economic development,” Waldman said.
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