Welcome!

News Feed Item

LA City Council Minimum Wage Hike for Hotel Industry Will Cost Jobs, Taxes and Future, Independent Study Shows

Entry-Level Positions and Convention Center Plans at Risk; Workers in Other Industries Left Without Similar Economic Support

SACRAMENTO, CA--(Marketwired - June 26, 2014) - A Los Angeles City Council proposal to expedite a minimum-wage increase for hotel workers would have serious negative consequences for hotel workers and the city's economy, according to an independent study released today.

The City Council is considering a measure that would raise the minimum wage to $15.37 per hour for hotel workers in 2015, making it the highest amount with the quickest implementation in the nation, according to the study by PKF Consulting USA.

"The more we examined the data, the more the unintended consequences became clear," said Bruce Baltin, a PKF senior vice president who teaches at the Sol Price School of Public Policy at the University of Southern California. "The minimum wage proposal, as it currently stands, will hurt some industry employees, reduce city hotel-related taxes, and slow or prevent critically needed hotel expansion."

The study, "Impact of Minimum Wage Increase on Los Angeles Hotel Workers," found the following problems with initial proposals by the City Council that will lead to negative outcomes:

  • The $15.37 per hour minimum wage under discussion represents the largest percentage increase of any recent minimum wage law -- larger even than San Francisco. The increase would be made in too short a time for businesses to adjust.
  • The proposals fail to account for the higher earnings of tipped workers; an appropriate consideration for tips would reduce the economic burden on hotel payrolls by 26 percent.
  • Only non-union hotels would be covered, resulting in an unfair system for both workers and hotels, particularly where LA City boundaries are next to other unaffected cities.
  • The increase is limited to the hotel industry; rather than a citywide increase that applies to all minimum wage workers in all industries including retail and restaurants.

"We're not surprised by the study's conclusions, because we have already seen layoffs and financial losses at hotels at SeaTac and Long Beach because of similar ordinances," said Lynn S. Mohrfeld, President & CEO of the California Hotel & Lodging Association, which sponsored the study. "We're confident that the study the City Council is about to conduct will be the third independent study to confirm these harmful unintended consequences."

The report found that the economic burden of a rapid, hotel-only wage increase will cause hotel companies and outside investors to reconsider plans to build or expand hotel space in the city. That could prove devastating to the city's hopes to attract large groups and meetings to the new convention center because there would not be enough hotel rooms to accommodate them.

It is likely, the report said, that hotels would curtail or eliminate things like room service, specialty dining and other amenities, making hotels in Los Angeles less competitive compared to nearby cities. That would, in turn, reduce occupancy and lead to a corresponding reduction in the hotel taxes collected by the city.

The California Hotel & Lodging Association (CH&LA) is the largest state lodging industry association in the nation and a Partner State Association of the American Hotel & Lodging Association. Its members include all segments of the lodging industry including the California Association of Boutique & Breakfast Inns (CABBI) -- California's largest association of professional innkeepers and certified bed and breakfast inns. CH&LA is the leading resource for communicating and protecting the rights and interests of the California lodging industry. CH&LA was established in 1893. CH&LA is on the web at www.calodging.com.

More Stories By Marketwired .

Copyright © 2009 Marketwired. All rights reserved. All the news releases provided by Marketwired are copyrighted. Any forms of copying other than an individual user's personal reference without express written permission is prohibited. Further distribution of these materials is strictly forbidden, including but not limited to, posting, emailing, faxing, archiving in a public database, redistributing via a computer network or in a printed form.

Latest Stories
SYS-CON Events announced today that Grape Up will exhibit at SYS-CON's 21st International Cloud Expo®, which will take place on Oct. 31 – Nov 2, 2017, at the Santa Clara Convention Center in Santa Clara, CA. Grape Up is a software company specializing in cloud native application development and professional services related to Cloud Foundry PaaS. With five expert teams that operate in various sectors of the market across the U.S. and Europe, Grape Up works with a variety of customers from emergi...
SYS-CON Events announced today that Hitachi, the leading provider the Internet of Things and Digital Transformation, will exhibit at SYS-CON's 20th International Cloud Expo®, which will take place on June 6-8, 2017, at the Javits Center in New York City, NY. Hitachi Data Systems, a wholly owned subsidiary of Hitachi, Ltd., offers an integrated portfolio of services and solutions that enable digital transformation through enhanced data management, governance, mobility and analytics. We help globa...
SYS-CON Events announced today that Juniper Networks (NYSE: JNPR), an industry leader in automated, scalable and secure networks, will exhibit at SYS-CON's 20th International Cloud Expo®, which will take place on June 6-8, 2017, at the Javits Center in New York City, NY. Juniper Networks challenges the status quo with products, solutions and services that transform the economics of networking. The company co-innovates with customers and partners to deliver automated, scalable and secure network...
SYS-CON Events announced today that CA Technologies has been named "Platinum Sponsor" of SYS-CON's 20th International Cloud Expo®, which will take place on June 6-8, 2017, at the Javits Center in New York City, New York, and 21st International Cloud Expo, which will take place in November in Silicon Valley, California.
Developers want to create better apps faster. Static clouds are giving way to scalable systems, with dynamic resource allocation and application monitoring. You won't hear that chant from users on any picket line, but helping developers to create better apps faster is the mission of Lee Atchison, principal cloud architect and advocate at New Relic Inc., based in San Francisco. His singular job is to understand and drive the industry in the areas of cloud architecture, microservices, scalability ...
Back in February of 2017, Andrew Clay Schafer of Pivotal tweeted the following: “seriously tho, the whole software industry is stuck on deployment when we desperately need architecture and telemetry.” Intrigue in a 140 characters. For me, I hear Andrew saying, “we’re jumping to step 5 before we’ve successfully completed steps 1-4.”
DevOps is being widely accepted (if not fully adopted) as essential in enterprise IT. But as Enterprise DevOps gains maturity, expands scope, and increases velocity, the need for data-driven decisions across teams becomes more acute. DevOps teams in any modern business must wrangle the ‘digital exhaust’ from the delivery toolchain, "pervasive" and "cognitive" computing, APIs and services, mobile devices and applications, the Internet of Things, and now even blockchain.
@DevOpsSummit has been named the ‘Top DevOps Influencer' by iTrend. iTred processes millions of conversations, tweets, interactions, news articles, press releases, blog posts - and extract meaning form them and analyzes mobile and desktop software platforms used to communicate, various metadata (such as geo location), and automation tools. In overall placement, @DevOpsSummit ranked as the number one ‘DevOps Influencer' followed by @CloudExpo at third, and @MicroservicesE at 24th.
The explosion of new web/cloud/IoT-based applications and the data they generate are transforming our world right before our eyes. In this rush to adopt these new technologies, organizations are often ignoring fundamental questions concerning who owns the data and failing to ask for permission to conduct invasive surveillance of their customers. Organizations that are not transparent about how their systems gather data telemetry without offering shared data ownership risk product rejection, regu...
In his keynote at @ThingsExpo, Chris Matthieu, Director of IoT Engineering at Citrix and co-founder and CTO of Octoblu, focused on building an IoT platform and company. He provided a behind-the-scenes look at Octoblu’s platform, business, and pivots along the way (including the Citrix acquisition of Octoblu).
SYS-CON Events announced today that SoftLayer, an IBM Company, has been named “Gold Sponsor” of SYS-CON's 18th Cloud Expo, which will take place on June 7-9, 2016, at the Javits Center in New York, New York. SoftLayer, an IBM Company, provides cloud infrastructure as a service from a growing number of data centers and network points of presence around the world. SoftLayer’s customers range from Web startups to global enterprises.
Did you know that you can develop for mainframes in Java? Or that the testing and deployment can be automated across mobile to mainframe? In his session at @DevOpsSummit at 20th Cloud Expo, Vaughn Marshall, Sr. Principal Product Owner at CA Technologies, will discuss and demo how increasingly teams are developing with agile methodologies using modern development environments and automating testing and deployments, mobile to mainframe.
As pervasive as cloud technology is -- and as persuasive as the arguments are for using it -- the cloud has its limits. Some companies will always have security concerns about storing data in the cloud and certain high-transaction applications will always be better suited for on-premises storage. Those statements were among the bottom-line takeaways delivered at Cloud Expo this week, a three day, bi-annual event focused on cloud technologies, adoption and associated challenges.
Multiple data types are pouring into IoT deployments. Data is coming in small packages as well as enormous files and data streams of many sizes. Widespread use of mobile devices adds to the total. In this power panel at @ThingsExpo, moderated by Conference Chair Roger Strukhoff, panelists will look at the tools and environments that are being put to use in IoT deployments, as well as the team skills a modern enterprise IT shop needs to keep things running, get a handle on all this data, and deli...
Quickly find the root cause of complex database problems slowing down your applications. Up to 88% of all application performance issues are related to the database. DPA’s unique response time analysis shows you exactly what needs fixing - in four clicks or less. Optimize performance anywhere. Database Performance Analyzer monitors on-premises, on VMware®, and in the Cloud, including Amazon® AWS and Azure™ virtual machines.