California is a state with political leaders who are stuck on stupid.
Indeed, it’s hard to find any other explanation for the state’s Democrat leaders’ mind-boggling decisions.
The Los Angeles City Council recently approved an ordinance to raise the minimum wage for the city’s hotel and airport workers from the current $17 an hour to $30 an hour by 2028. The Council voted 8-3 to approve this wage hike. The proposal now heads to Democrat Mayor Karen Bass of wildfire management infamy.
Of course, the justification for this massive wage increase for low-skilled workers is the city’s dubious “living wage” policy — a policy apparently devoid of sound economic sense, but rich in emotional appeal.
Should Bass sign it, the ordinance directs that the minimum wage for hotel workers be increased to $22.50 beginning in July, with subsequent annual increases of $2.50 over the next three years. The ordinance also requires that workers receive a new $8.35 per hour healthcare benefit, effective July 2026.
“The proposed ordinance calls for a dramatic increase in hotel wages within 60 days of adoption,” the Hotel Association of Los Angeles pointedly observed. “Increasing hourly wages to $24.40 with an additional $8.35 for health benefits would result in a 69% increase in payroll in just two months. … No industry can afford that financial uptick in such a short period of time.”
To make matters worse, the city’s hotel industry has yet to fully recover from the COVID pandemic, as the number of hotel visitors is just 79% of the 2019 numbers. As a result of lower occupancy rates, the city lost 11,000 hotel jobs last year alone. The right-to-work advocacy group, Center for Union Facts, contends that “this new proposal will kill more jobs and raise costs for visitors.”
On top of this craziness is the fact that Los Angeles will be hosting the Summer Olympic Games in 2028. The city was selected to host the games in 2017, and in the preceding years, it has developed sponsorship deals with several hotels in the city to offer discounts during the games.
However, with this ordinance threatening to nearly double the minimum wage for hotel workers, several hotels are now poised to withdraw from this discounted room agreement. As Mitchell Hochberg, president of real estate investment firm Lightstone Group, explained, “We agreed to certain rates at the hotels at that time, and it’s not viable for us to be able to agree to charge the same rates that we calculated based upon a $17 minimum wage that’s now going to be almost double that.”
Thus, what this ordinance effectively does is turn a month when the hotel industry is looking to make money into a situation where they will effectively be losing money.
The irony with this “livable minimum wage” ideal is that it results in fewer jobs and fewer available work hours. It actually makes it harder for low-skilled workers to earn a livable wage because it makes it harder for them to get a job. With leadership like this, it’s no wonder California’s population is shrinking.
