The Los Angeles City Council voted Wednesday to approve a sweeping package of minimum wage increases for workers in the tourism industry, despite objections from business leaders who warned that the region is already facing a slowdown in international travel.
The proposal, billed by labor leaders as the highest minimum wage in the country, would require hotels with more than 60 rooms, as well as companies doing business at Los Angeles International Airport, to pay their workers $30 per hour by 2028.
Jessica Durrum, a policy director with the Los Angeles Alliance for a New Economy, a pro-union advocacy group, said business leaders also issued dire warnings about the economy when previous wage increases were approved — only to be proved wrong. Durrum, who is in charge of her group’s Tourism Workers Rising campaign, told the council that a higher wage would only benefit the region.
According to the American Hotel & Lodging Associations’ 2016 State of the Industry report, the combined total of salaries, wages, contract labor, bonuses, and payroll administration is ~40% of total hotel operating costs.
Note that this figure also includes salaries, bonuses, and payroll administration. One could double the wages of hourly employees and the cost of a night’s stay would never increase more than 20%.
Just to add more detail, for hotels I’m familiar with the general manager makes $150-200k or more while front desk and housekeeping staff make about $12/hr.