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The Economy Improves — Will the Minimum Wage?




As the economy slowly rebounds, we need to ask what kind of recovery we want in Los Angeles.

Experts point to tourism as a key industry poised to help drive recovery and growth in our region. The potential is certainly there. Tourism is the largest employer in Los Angeles, accounting for one in ten jobs. And hotels in particular have recovered past pre-recession levels, with projections for strong growth. Industry analysts PFK Hospitality Research forecast revenue per available room in Los Angeles to grow by an average of 5.6 percent per year over the next five years on top of an 11.7 percent increase this year. (For comparison, the long-run average is 3.3 percent.)

However, jobs in hospitality and tourism come in very different shapes. Some of our large hotels succeed while paying good middle-class wages and benefits. Others offer only poverty jobs that leave workers struggling to support themselves, let alone their families.

We know it’s possible for hotels to do good business while offering good jobs – many do. But it’s also possible to squeeze workers, cut corners and send extra profits back to Wall Street. Clearly, growth in Los Angeles tourism could follow a couple different paths. Do we have a choice?

The year 2012 brought a groundbreaking victory in Long Beach. In an historic initiative, residents there came together and decided to demand more from the big hotels they’ve supported with an estimated $114 million in direct hotel subsidies alone. Voters decided that an economy dominated by large out-of-town corporations and poverty jobs wasn’t the right foundation on which to build a healthy community: By large majorities, they passed a reasonable minimum wage for hotel workers in the city.

What makes sense in Long Beach also makes sense here in Los Angeles – guaranteeing that the people who work in our largest, most successful hotels are able to earn a decent standard of living. The direct impact of a better minimum wage would be to allow thousands of hotel workers to better support their families. But the benefits would be felt throughout Los Angeles. A recovery centered on good jobs would mean less poverty, more spending with local businesses, and a healthier community. That’s the only kind of recovery we should want.

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