Leading Meeting Professionals

Professional Convention Management Association

February 03 2014

How The Minimum Wage Debate Is Impacting Hotels

By David McMillin

minimum wage

As citizens around the country react to President Obama’s push for a higher minimum wage, some hotel workers are already benefiting from higher hourly earnings.

As of January 1, employees in hotels and hotel restaurants with more than 100 rooms near the Seattle-Tacoma International Airport now earn a minimum of $15 per hour. The increase, part of Prop 1, was approved by voters in the area in the November election, and it’s a sizable jump from the existing statewide minimum of $9.32.

In Los Angeles, union leaders and some City Council members are pushing a similar proposal that would require large hotels to pay employees at least $15.37 per hour. Currently, California’s minimum wage is $8 per hour. Backers of the plan recently gained a big ally, too: Mayor Eric Garcetti says he will sign the initiative if it’s passed by the City Council.

Supporters of the hike say more money will pay off for everyone. The advocates behind the Yes! for SeaTac initiative estimate that higher wages will create more than 400 new jobs and inject $54 million into the local economy. In California, the Los Angeles County Federation of Labor hopes to extend the hotel minimum wage hike to the more than 800,000 people who currently make less than $15 per hour. If that happened, an economic impact study from the LACFL projects more than 59,000 new jobs.

SEE ALSO: How Obamacare Could Impact Hoteliers

Unhappy Hoteliers

While those numbers sound promising, some hotel owners disagree with the claims, voicing concerns that higher wages will translate to higher room rates, job cuts and staff reductions. The American Hotel & Lodging Association plans to lobby on behalf of concerned members. A release from the AH&LA indicates that hoteliers will “work closely with partners at the state and local level to beat back extreme living wage initiatives that are proven job killers.”

“We stress to elected officials, both state and federal, that government at all levels must avoid introducing any proposals that harm the overall economic climate and hinder the lodging industry’s ability to continue driving growth and job creation,” Katherine Lugar, President and CEO, AH&LA, said.

Nationwide Wage Hikes?

While some businesses and lawmakers have conflicting views of the true impact of a minimum wage increase, more Americans are beginning to back the need to send employees home with bigger paychecks. A recent Quinnipiac poll shows that 71 percent support a minimum wage hike.

The potential for wage increases isn’t the only news weighing on the hotel industry. Click here to read about five key challenges impacting hoteliers today.

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