Well, not exactly, but the City Council has enacted a new ordinance that will make it nearly impossible for hotels both to hire workers and maintain their profitability.
As this op-ed in the Los Angeles Times explains, last week the council voted to raise the minimum wage for hotel workers within city limits to $15.37 an hour beginnning next year. Christopher Thornburg of the Beacon Institute notes that the new wage would be a 50-percent hike over the current base wage, and that it’s likely to cause major job losses in an industry that’s seen healthy gains in recent years. (Note: Except at hotels near Los Angeles International Airport, which enacted a “living wage” regulation, and — surprise! — has experienced a drop in jobs.)
In a previous life, I was in the hotel industry: For seven years (during the 1980s) I was a desk clerk and later the front office manager at the Carolina Inn near the UNC-Chapel Hill campus. Near the end of my time at the Inn, when I was earning my top wage, I made (in inflation-adjusted terms) slightly less than the $15.37 an hour entry-level housekeepers will have to be paid next year in L.A. I’ll guarantee the housekeeping staff came nowhere near that amount — and we were state employees.
How will hotels respond? They’ll raise rates — as high as a competitive market will allow ‚ and cut staff, of course, which will limit guest services. My guess is, if you’re visiting a hotel in Los Angeles and staying more than one night in the same location, you may be expected to pay an extra fee ($10-$20 a night) for housekeeping services. If you want clean linens, they’ll ask you to pick them up at the front desk. Room service? Say hello to the $35 burger!
While we repeatedly see polling from left-leaning groups pointing out the popularity of proposals that would raise the federal minimum wage to $10, those same pollsters never suggest there might be trade-offs involved. Such as a follow-up question asking if you would continue to support a wage hike if job losses resulted.
Maybe these groups should ask similar questions in Los Angeles, say, about a year from now.