Maximum Distortion About Hotel Minimum Wages

After the triumphant 2014 passage of Los Angeles’ $15.37 hourly minimum wage ordinance for city hotel workers, there came a moment of puzzlement for many at City Hall and elsewhere. Why was L.A.’s large hospitality union asking that some of its members be paid less than the promised wage? Was this, as some suggested, a cynical deal to to make a union shop more attractive to employers by making sure union workers got paid less than non-union employees?

This issue, as one person close to the situation said on condition of anonymity, “is a complex and challenging one.” The basic problem, however, seems to be the inability of many to understand the diverse needs and desires of working people, and the fact that some benefits may mean more to them than a fatter pay envelope would, if it excluded those benefits.

A recent Los Angeles Times article just about editorialized on the subject, referring to “a series of loopholes that cut union workers out of the very pay increases their leaders have championed.”

The article quoted two bellmen and a waitress at the Sheraton Universal, a hotel represented by UNITE HERE Local 11, complaining that it was unfair they only collected the current state minimum of $10 an hour in salary, while a nearby non-union hotel would pay $15.37 an hour. Both these positions garner very substantial tips or service charges in addition to the hourly wage, however, making them some of the best compensated of all hotel workers, although the base pay rate for tipped employees is $10 an hour. As it happens, UNITE HERE has compelled management to agree to return all tips to workers, instead of holding on to some of them, as hotels once did.

What gets left out of the complaint here, however, is how the wage and benefits package is determined. It isn’t, in fact, imposed by “union bosses” on the workers; as UNITE HERE spokeswoman Daria Ovide points out, the wage agreements are negotiated by the workers themselves, through their representatives. “I don’t think any union workers get paid less overall than a non-union worker does,” said Ovide. “There is a mosaic of benefits that non-union workers simply do not get. For instance, $7.50 an hour for full-family medical benefits alone. Pension benefits, legal benefits, training benefits for people who are laid off when hotels close to renovate. Add these up to the [$10 minimum] hourly wage and you just get more [than $15.37 an hour.]”

Ana Hernandez, a UNITE HERE shop steward who works as a telephone operator at the Sheraton Universal, pointed out that the union contract also brings work condition benefits, unavailable to non-union workers, that are hard to put a dollar value on. She said: “We deal with a lot of hotel issues.” For instance, “union housekeepers do about 14 rooms a shift. Non-union housekeepers do as many as 30.” (A hotel employer spokesperson did not respond to a request for comment for this article.)

Union officials agree that, because of the nature of their earnings, union workers who get tipped don’t always get paid as much per hour as union workers who work in areas where there is no tipping. This results from the negotiation process between the workers and management, that also tries to make union workers’ “total compensation” equitable. The agreed-upon contract, of course, is then voted on by the union rank and file.

“It’s called majority rule,” said Local 11 President Tom Walsh. He observed that it doesn’t always satisfy everyone. He contended the idea that his union would take a lower salary simply to make unionization more appealing to management is absurd. There certainly hasn’t been a rush of invitations from management inviting UNITE HERE to organize non-union hotels, because their managers understand that even with a lower starting wage, union agreements cost them more.

Another union official, who asked not to be identified, noted: “Employers don’t pick unions, workers do. Not everyone needs the same benefits package. Undocumented people may need health care the most. Others need more sick days. People in sight of retirement want pension benefits. They don’t always care what form their earnings come in.”

He added, “They’re calling this a sweetheart deal. But unions couldn’t go on representing workers if they got them a $13 wage with no benefits when there was a $15 wage on the books.”

Walsh noted that the lower starting salary is not set in stone. “We’re going to fight harder for more money the next time we negotiate.”

Marc Haefele is a commentator on KPCC’s Off Ramp program and has written for the New York Times and Los Angeles Times.