Should the responsibility of providing service economy workers with a living wage fall on employers or customers? From Seattle to San Diego, U.S. cities — where there’s a concentration of such workers — have been bypassing federal laws to take up this question in recent years. This week, the Los Angeles City Council pressured hotels to do right by their employees when they approved raising the minimum wage of hotel workers to $15.37 an hour.
Los Angeles Alliance for a New Economy’s Raise LA campaign called for the wage hike, drawing attention to the fact that 40 percent of hotel workers in L.A. live in poverty. Hotel employees in L.A. typically work fewer than 40 hours a week, according to LAANE’s James Elmendorf. The increase could mean that a hotel worker’s yearly income could go from around $18,000 to around $26,000. “That’s still not nearly enough,” says Elmendorf, “but it gets you able to not just barely make your rent, but you can actually begin to think about how to get food, how to occasionally get to the movies, and how to spend time with your kids. It’s helping to get families to be able to afford to live in one of the most expensive cities in the country.”
According to an Economic Roundtable report, the average hourly wage for maids and housekeepers in L.A. is $9.03, below the national average of $9.41 (estimated by the U.S. Bureau of Labor Statistics in 2012).
This decision comes two weeks after Marriott announced its “The Envelope Please” campaign, which seeks to encourage guests to generously tip their housekeepers. In a press release, the company — which partnered with Maria Shriver’s A Woman’s Nation non-profit for the push — said “Because hotel guests do not always see or interact with room attendants, their hard work is many times overlooked when it comes to tipping.” Some criticized Marriott for not also pledging to increase wages.
The hotel chain countered that if it raised wages, it would have to raise room rates, hence losing a competitive advantage. But the fact that the company recently reported $192 million in second-quarter profits (up 7.3 percent from the same quarter last year) didn’t bolster that argument.
Elmendorf says that encouraging people to tip is good, but “it does not replace what a wage is. We pointed out that state law prohibits that. Tips do not, and should not, count as wages. Part of the reason for that is because they are variable. They are not something that anyone can rely on. While some people like to think that an employee making a tip is making a ton of money, the reality is, a tip is a small additional bonus for a worker.”
Opponents to the wage hike say that it might bring economic challenges like layoffs. At this week’s city council hearing, Christopher Thornberg, whose firm authored a study on the hike’s dangers, said, “They kept going back to the idea of this low-income Hispanic woman working two jobs who doesn’t have enough time to spend with her kids. Well, she’s going to have a lot more time to spend with her kids when she doesn’t have a job.”
LAANE contends that the robust hotel industry in L.A. can support the hike with minimum layoffs. The Economic Roundtable report estimates that induced economic impact (from the workers’ increased spending power) would support the equivalent of an additional 283 local, year-round jobs and $39.6 million in local annual sales in the community.
After a second vote next week, the ordinance will be put in front of Mayor Eric Garcetti, who has pledged his support. Garcetti recently announced his own campaign to enact a citywide minimum wage increase to $13.25 by 2017.
The Equity Factor is made possible with the support of the Surdna Foundation.
Alexis Stephens was Next City’s 2014-2015 equitable cities fellow. She’s written about housing, pop culture, global music subcultures, and more for publications like Shelterforce, Rolling Stone, SPIN, and MTV Iggy. She has a B.A. in urban studies from Barnard College and an M.S. in historic preservation from the University of Pennsylvania.