The long, brutal fight for a living wage for L.A. airport-area hotel workers will end on July 5 in a victory for labor setting the stage for another showdown, this time over unionization.
The hotel owners could have put a referendum on the November ballot to overturn the law, but have decided otherwise. Harvey Englander, spokesman for the Los Angeles Hotel Association, said in a recent radio forum that they wouldn’t pursue the ballot option and would honor the law.
Englander was traveling and couldn’t be reached for comment.
The living wage ordinance, passed by the Los Angeles City Council in January 2007, requires airport-area hotels to pay employees $9.39 an hour with health insurance or $10.64 an hour without benefits.
Before the law took effect, seven of the 13 hotels in the Century Boulevard corridor filed a lawsuit to block the ordinance on grounds it was substantially similar to a previous living wage law the city had rescinded after reaching a compromise with the hotels. The hotels had cried foul contending the second ordinance was nearly identical to the first.
The case worked its way through the legal system for more than a year. On April 10, the State Supreme Court declined to hear the suit, leaving a referendum as the only option to overturn the law unless the hotels file a second lawsuit on different grounds, such as whether the city has the authority to pass a law setting private business wages.
Peter Dumon, a Chicago-based investor who owns the Radisson Hotel, plans to comply with the new law and asked other hoteliers to do the same in a recent op-ed in the Los Angeles Times.
“The market rate for labor is already above the ordinances,” Dumon told the Business Journal. “I don’t see labor in Los Angeles getting cheaper, so I don’t understand why some of my peers are spending literally millions of dollars fighting this when the market is already above it.”
Four other hotels the Sheraton Gateway, Travelodge, Four Points by Sheraton and Westin Hotel LAX are already in compliance with the living wage or plan to comply by the deadline.
However, Kurt Petersen, L.A. organizing director for the Unite Here hotel workers union, said he doesn’t expect enthusiastic compliance.
“We want the hotels to comply with the ordinance. The history would lead us to believe they won’t,” Petersen said. “July 5 will be an interesting day to see if they pay the wage, don’t pay and wait for enforcement or file a lawsuit.”
Now the process moves to the next stage unionizing the workers which was the real agenda behind the living wage from the beginning, according to Joe Matthews, a fellow at the New America Foundation who has tracked the issue.
Union organizers backed the living wage ordinance, which included a provision that exempted hotels with collective bargaining agreements.
“The bottom line for the unions was not a living wage, it was unionization,” Matthews said.
Since the living wage campaign started, the two Sheraton properties and the Westin have allowed workers to unionize. Also, Dumon confirmed that the Radisson employees recently voted to form a union.
“You have to look at the living wage as the floor, not the ceiling,” said William Smart Jr., hospitality specialist at Los Angeles Alliance for a New Economy, the labor advocacy group behind the higher wage campaign. “As time progresses, the workers will have the option to form a union. That’s totally up to them.”
At the radio forum, broadcast on KPCC-FM (89.3) on June 1, Englander stated: “Every hotel that I represent will be glad to hold a union election tomorrow.”
But Petersen of Unite Here said hotel opposition to union votes could delay the process.
“We could have an election tomorrow, but if the hotels keep fighting, we won’t have final results for years,” he said. “We don’t want that.”
Smart believes LAX hotels won’t raise their rates to offset salary hikes required by the living wage law. A study by the Alliance for a New Economy found that revenue per available room at the LAX hotels had risen 10 percent per year since 2005. He estimated revenues for the 11 properties included in the study jumped 30 percent in 2007 alone.
Petersen argues compliance with the living wage could increase revenues even more by upgrading the neighborhood, because higher wages would raise the living standards of the workers, who rent apartments near the hotels.
“Century Boulevard could be much better for everybody and room rates would be higher, but the hotel owners won’t let it happen,” he said. “Look at Hollywood it wasn’t doing well for a long time until labor, community groups and business got together and made it a flourishing tourist destination. Century Boulevard has been left behind.”
“If you don’t have labor peace, that inhibits the growth for the overall market,” he said. “The city is willing to invest significant amounts in upgrading the area, but not until the political constituencies are satisfied. For hotels to fight this is penny wise and dollar foolish.”