The Los Angeles City Council on Wednesday moved to potentially delay a contentious $30 hourly minimum wage for hotel and airport workers, saying the action may be needed to stave off a business-backed ballot initiative to eliminate the city’s gross receipts tax.
In a 9-6 vote, the council voted initial approval of an ordinance to postpone implementation of the $30 hourly minimum til 2030, instead of 2028. But L.A. City Council President Marqueece Harris-Dawson, who introduced the motion, called it “a placeholder” that allows negotiations among city officials, hotel and airport businesses and labor unions to continue in the coming days. Another vote would be needed to formally delay implementation.
Harris-Dawson said the council would revisit the discussion on Tuesday.
“I want to assure every member of this council and every member of the public that the labor movement has come to the table in good faith and has moved a lot. The business community has been at the table form the beginning and moved some,” Harris-Dawson said.
The move came after a coalition of airline and hotel businesses gathered enough signatures to qualify a measure for the Nov. 3 ballot that would repeal the city’s gross receipts tax, which if approved by voters would strip about $740 million from the city’s general fund, which pays for police officers, firefighters and other services, in the first year alone. Over five years it would cost an average of $860 million annually.
The Council voted to certify the measure for the ballot, but backers of the measure — including Delta Airlines, United Airlines and hotel trade groups, have indicated they will abandon the campaign if the council halts or delays the $30 hourly minimum.
Labor groups that have pushed for the $30 minimum wage said it would be unlikely voters would ever approve eliminating the business tax.
But Matthew Szabo, the city administrative officer, said the consequences of L.A. potentially losing its second largest revenue stream would prompt it to immediately declare a fiscal emergency.
“Thousands of layoffs would be required. That’s not a question, that’s a certainty,” Szabo said at the Wednesday meeting. “The city would be forced to implement austerity measures far worse than seen during the Great Recession or the COVID-19 pandemic.”
Szabo recommended fiscal planning on reductions to staff in the event the measure is approved. He said job cuts that would ensue would then “debilitate” the city’s homelessness response, force the city to cut some 2,000 police officers and put its Olympics preparations “in severe jeopardy.”
“I’m recommending and I’m insisting that we take actions now,” Szabo said. “We need to do that work ahead of time.”
Hospitality union Unite Here Local 11 called the leveraging of the business tax repeal measure a “corporate shakedown” and “unethical scheme” in a Monday letter 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 engaged in negotiations in the last 72 hours to reach an agreement, but that they had failed thus far. He said business groups had moved to “hold hostage this city and these workers.”
Rosanna Maietta, president and chief executive of the American Hotel and Lodging Assn. however, has said relief from higher labor costs is much-needed in an industry that has struggled to bounce back from pandemic shutdowns.
She has described the business tax repeal effort as “a turning point” with the business community having “refused to be passive” after “years of being targeted by policy decisions that threaten [the] industry’s viability.”
The vote signifies the latest push by the group to slow or halt wage increases for tourism workers in the city, increases that hospitality and service worker unions have pushed for to coincide with the 2028 Olympics.
The American Hotel and Lodging Assn. had previously sought to entirely repeal the $30 per hour minimum wage through a ballot measure, but in September failed to secure enough signatures to qualify amid allegations that petition circulators made false or misleading statements to gather voter support.
Dozens of airport and hotel workers lined up outside of City Hall on Wednesday morning to enter the meeting room. Many described during the public comment period shock and dismay at city leaders considering taking back wage increases that were already a done deal.
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 harder for them.”
“At a time when gas prices are outrageous … you want to eliminate our raise? Shame on any councilmember that would support this proposal,” Lewis said.
Erick Cruz, an employee at Concord Collective, which operates several dining locations at LAX, said his family depended on the wage increases that were already underway as part of the previously approved timeline.
“Please do not lower our wages. My daughter is counting on this,” Cruz said.
Others said they had been able to pay off medical bills, feel less pressure to work long overtime hours and overall had gained more firm financial footing in recent months.
Council members Eunisses Hernandez, Ysabel Jurado, Nithya Raman, Hugo Soto-Martinez, Curren Price and Katy Yaroslavsky voted against the motion.
Hernandez said approval of the motion sends a “terrible message that corporate pressure matters more than workers’ lives” and that workers “should not be pushed deeper into poverty while corporations profit off the global spotlight” of the Olympics.
Maria Cortes of the Hotel Erwin in Venice Beach, meanwhile, said council members should “recognize the financial realities” family-owned hotels face. She said the hotel’s rooftop bar and kitchen faced growing competition from nearby restaurants that were not subject to the same increased wage requirements as establishments within hotels. Hotels operate on thin margins, she said, and higher labor costs “can lead to difficult decisions such as reducing hours, cutting services or closing restaurant operations altogether.”
Nella McOsker, president & chief executive of the Central City Assn., said downtown businesses represented by her organization were not seeing room bookings and other economic activity they would need to be able to support a steep rise in labor costs.
“I see hotels empty, hotels closing,” she said. “We need to balance challenges the tourism industry faces.”
Times staff writer David Zahniser contributed to this report.
