By JESSICA GOODHEART
and CAROLINA BRIONES
The Los Angeles City Council is expected to vote soon on a new compromise that would extend the Los Angeles living wage ordinance to 3,500 LAX-area hotel workers.
Los Angeles business leaders should applaud this action and not just because they averted a costly campaign to defeat an ordinance with, according to one recent poll, support from 74 percent of likely voters. (Last month, business leaders reached a deal with community members to drop a referendum campaign to defeat an earlier version of the law after the poll was released.)
The business community should applaud the City Council because the hotel living wage law is good for business. The new law will apply the city’s living wage rate of $10.64 per hour (or $9.39 for those with employer-provided health insurance) to 3,500 workers at Century Boulevard hotels.
This will help the hotels directly by reducing turnover, absenteeism, and increasing productivity. A 2005 study we co-authored, along with two University of California economists, found that the Los Angeles living wage ordinance reduced absenteeism and turnover while having minimal impacts on employment.
But as any employer knows, a good business climate is also about how livable our city is. We need good, safe schools, a strong tax base and healthy communities to attract tourists, workers, and investors to our city.
For too long, our economy has traveled the low road. More than 3.9 million county residents are poor enough to qualify for government assistance, middle class neighborhoods are rapidly disappearing, and we have health insurance crisis of epic proportions.
Our fastest growing occupations retail sales clerk, waiter, security officer typically pay $10 or less per hour.
The City Council has made a bold move in addressing this crisis, and it is an appropriate action to take since the explosion of working poverty threatens many of our civic institutions our schools, our criminal justice system, our health care system and it hurts our economy.
Poverty problems
Parents who juggle two or three jobs cannot supervise their children, contributing to staggering drop-out rates in some communities. Teenagers who do not feel they have a future are more likely to turn to gangs and violence.
Workers who lack health care must rely on emergency room care, a cost that is born by taxpayers and anyone who winds up waiting in line for urgent care. California taxpayers paid over $4 billion in 2002 to provide health care coverage for people in working families though public programs such as Medi-Cal and Healthy Families, according to a UC Berkeley study.
The living wage law is a small step toward addressing the deprivation faced by these workers, and the costs we bear as a society. Under the living wage law, LAX-area hotel workers are not guaranteed health coverage, and $10.64 per hour is precious little pay for a single mother or even for a family with two working parents. But the living wage law moves our economy in the right direction.
When asked what is in this compromise deal for business, the typical commentator will point to city investment in public infrastructure, marketing and job training that will help the area’s businesses grow and the adoption of a clear set of criteria that the City Council must consider before passing any future living wage bills.
These changes to the ordinance are also to be applauded. Proponents of the living wage law have long argued for the need to invest more in the Century Corridor in order for the area to reach its full potential. A clear and transparent process for passing policy strengthens our democracy.
But enlightened business leaders know that a strong economy cannot be built on the backs of poor workers. There is much more to be done to address poverty jobs in this industry.
Let’s get to work making the tourism industry a model sector, where businesses, workers, and community members work in partnership for shared prosperity.
Jessica Goodheart and Carolina Briones are co-directors of research at the Los Angeles Alliance for a New Economy.
