LA Council takes first step to delay $30-an-hour minimum wage for hotel, airport workers

The Los Angeles City Council on Wednesday moved to delay a minimum wage of $30 an hour for hotel and airport workers, saying action may be needed to block a business-backed ballot initiative to end the city's receipts tax.

In a 9-6 vote, the council voted to initially approve an order to delay implementation of the $30 an hour minimum wage until 2030, instead of 2028. But LA City Council President Marqueece Harris-Dawson, who introduced the proposal, called it a “placeholder” that allows negotiations between city officials, hotel businesses and airlines to continue in the coming labor days. Another vote would be needed to legally delay implementation.

Harris-Dawson said the council will revisit the discussion on Tuesday.

“I want to assure all the members of this council and all the members of the community that the labor movement came to the table in good faith and has moved a lot. The business people were at the table in the beginning and moved others,” said Harris-Dawson.

The move came after a coalition of airline and hotel businesses gathered enough signatures to qualify for a Nov. 3 ballot measure that would end the city's receipts tax, which if approved by voters would take about $740 million from the city's general fund, which pays for police, fire and other services, in the first year alone. Over five years it would cost an average of $860 million a year.

The Council voted to confirm the ballot measure, but supporters of the measure – including Delta Airlines, United Airlines and hotel trade groups, have indicated they will abandon the campaign if the council stops or delays the $30 an hour minimum.

Labor groups that pushed for a $30 minimum wage said it would be impossible for voters to agree to eliminate the corporate tax.

But Matthew Szabo, the city's chief executive, said the consequences of LA's potential loss of second-largest revenue would prompt it to declare a fiscal emergency.

“Thousands of layoffs will be needed. That's not a question, that's a fact,” Szabo said at Wednesday's meeting. “The city will be forced to implement mitigation measures far worse than those seen during the Great Recession or the COVID-19 pandemic.”

Szabo recommended financial planning for layoffs if that approval were to happen. He said the resulting job cuts would “undercut” the city's response to homelessness, force the city to cut about 2,000 police officers and put its preparations for the Olympics at “grave risk.”

“I recommend and insist that we take action now,” said Szabo. “We need to do that work early.”

The Hospitality Unite Here Local 11 union called the passage of the business tax repeal measure “a failure of business” and “a flawed plan” in a letter Monday to the city attorney's office.

David Huerta, president of SEIU-United Service Workers West, which represents airport workers, said at Wednesday's meeting that the union had been in talks for the past 72 hours to reach an agreement, but had failed so far. He said the business groups were mobilized to “hold this city and these workers.”

Rosanna Maietta, president and CEO of the American Hotel and Lodging Assn. however, he said relief from high labor costs is much needed in an industry that has struggled to recover from the pandemic shutdown.

He described the effort to repeal the business tax as “a turning point” where businessmen “refused to do nothing” after “years of being guided by threatening policy decisions.” [the] the efficiency of the industry.”

The vote reflects the party's latest push to reduce or freeze wage increases for tourism workers in the city, raising the profile of tourism and labor unions that have forced it to align with the 2028 Olympics.

American Hotel and Lodging Assn. previously wanted to completely repeal the $30 an hour minimum wage in a ballot measure, but in September failed to get enough signatures to qualify amid allegations that petitioners made false or misleading statements to gain voter support.

Dozens of airport and hotel workers lined up outside City Hall Wednesday morning to enter the meeting room. Many described during public comment the shock and dismay of city leaders at the thought of rolling back the wage increases that have already been implemented.

Debra Lewis, a server who has worked at LAX for more than 40 years and whose husband also works at the airport, said she has co-workers on the brink of homelessness and that the council “shouldn't make it difficult for them.”

“At a time when fuel prices are outrageous … you want to end our increase? Shame on any council member who supports this proposal,” said Lewis.

Erick Cruz, an employee at Concord Collective, which operates several restaurants at LAX, said his family is dependent on the pay raises that are already in place as part of a previously approved period.

“Please don't reduce the salaries. My daughter depends on this,” said Cruz.

Others say they have been able to pay off medical bills, feel less pressure to work more hours of overtime and have generally found financial stability in recent months.

Council members Eunisses Hernandez, Ysabel Jurado, Nithya Raman, Hugo Soto-Martinez, Curren Price and Katy Yaroslavsky voted against the proposal.

Hernandez said the approval of the proposal sends “a bad message that corporate pressure is more important than the lives of workers” and that workers “must not sink into poverty while companies profit from the global spotlight” of the Olympics.

Meanwhile, Maria Cortes of Hotel Erwin in Venice Beach, said council members should “be aware of the financial realities” of family-run hotels they face. He said the hotel's bar and kitchen area faced increased competition from nearby restaurants that were not subject to the same wage-raising requirements as hotel properties. He said hotels operate on thin margins, and high labor costs “can lead to difficult decisions such as reducing hours, reducing services or closing restaurants entirely.”

Nella McOsker, president and CEO of the Central City Assn., said the city businesses represented by her organization are not seeing the room bookings and other economic activities they will need to support the increase in labor costs.

“I see empty hotels, closed hotels,” he said. “We have to balance the challenges that the tourism industry is facing.”

Times staff writer David Zahniser contributed to this report.