The Los Angeles City Council voted Wednesday to approve a sweeping package of minimum wage increases for workers in the tourism industry, despite objections from business leaders who warned that the region is already facing a slowdown in international travel.
The proposal, billed by labor leaders as the highest minimum wage in the country, would require hotels with more than 60 rooms, as well as companies doing business at Los Angeles International Airport, to pay their workers $30 per hour by 2028.
Jessica Durrum, a policy director with the Los Angeles Alliance for a New Economy, a pro-union advocacy group, said business leaders also issued dire warnings about the economy when previous wage increases were approved — only to be proved wrong. Durrum, who is in charge of her group’s Tourism Workers Rising campaign, told the council that a higher wage would only benefit the region.
despite warnings from tourism industry
The dire warning being that the CEO’s and shareholders may need to wait another month to buy the second gold plated swimming pool
Would be a shame if businesses had to construct their businesses in ways where employees could live their lives.
Oh sure, they claim raising wages will hurt the industry, but where’s the pushback against raising hotel taxes or CEO salaries?
The CEO of Marriott made $5 million in 2022. In that year they employed 400,000 people. If the CEO got nothing the average employee would see a pay increase of $12.50 for the year.
CEO pay is never as big of a factor in employee compensation as you think.
I bet the $2.6 billion in stock buybacks they did that year could have went a long way for the workers.
That’s the point of the comment i think. Payroll isn’t where the money is made. It’s with monetary incentives that are very light on taxes.
Absolutely and that is the thing you should be focusing on as executive pay is rarely large enough to be why employees are getting screwed on pay
I agree that taking away the cash compensation of the CEO means very little in terms of increases for the average worker mathematically, but these executives are the ones making the decisions to do things like stock buybacks when their lowest level employees are likely seeking government assistance to make ends meet.
The cash take-home pay is only a part of their total compensation. It seems like they average about $15 million in equity each year. The disparity between the compensation between the CEO and the common workers is what is troubling.
The CEO has performance intensives that literally double their base salary based on metrics that are completely dependent on the increased performance of the lower level employees, who could only see that kind of increase in their wildest dreams.
Even with the total compensation you aren’t giving employees more than pennies.
To be clear that $5m was total compensation in my example. They would get just over $3 if it was just his 1.5 million salary.
Marriott CEO Anthony Capuano earned $21.9 million in 2024, compared to $22.7 million in 2023 https://onemileatatime.com/insights/highest-paid-hotel-ceo/
https://www1.salary.com/MARRIOTT-INTL-INC-Executive-Salaries.html
At Marriott, for example, CEO Anthony Capuano earned more than $21.9 million in total compensation during 2024, while a median employee earned about $42,000, according to the company’s proxy statement. https://skift.com/2025/05/13/ceo-to-worker-pay-ratios-top-5001-at-major-hotel-and-travel-companies/
$5 million is his cash income.
I’m not trying to argue that it would mean anything to not pay him. I just wanted to express my frustration that CEOs are actively rewarded and lauded for making decisions like stock buybacks when the actual backbone of the industry are looked at as drains on society because they require things like SNAP or rent assistance just to survive.
I mentioned 2022. You are talking about 2024. There are likely incentives and bonuses that account for that gap (beyond the effects of COVID which would impact 2022).
Regardless I agree overall that the workers should be paid more.
If your economy gets worse when wages go up in one industry, your economy is already diseased.
Sort of like RFK says no healthy people die due to COVID, I say no healthy economies die when people get better wages. I’ll wager I’m more correct than he is.
Tourism Industry = Hotel owners
Higher costs will cause fewer visitors, and there are far more affected by that than hotel owners. You can argue for or against the increase or this particular minimum, but don’t argue against the facts. If air travel gets more expensive, hotel owners are affected. If hotel prices go up, your operators, restaurants, transportation services, museums, and attractions will be affected.
I think the fewer visitors are a result of the federal governments campaign to install disdain across the world
If your staff relies on tips those “higher costs” you talk about already exist. It’s just invisible to the company.
Irrelevant unless tipping culture stops after the wage increase.
Counterpoint, business owners will always charge what the market will support. If people will book $1000/night rooms, they’ll charge that whether they’re paying their workers $10/hr or $30/hr.
Counter-counterpoint, “what the market will support” has a lot hidden in it, including the interplay between what you charge and your occupancy rate and whether your competitors can pull business away from you with lower rates. Your expenses are important to your bottom line and impact that equation.
Counter-counter-counterpoint, people can’t go on vacations and stay in hotels when their wages are so low that a majority of the country is just one missed paycheck away from bankruptcy.
I made no argument about whether there should be a wage increase. I merely pointed out that there will be some impact and it will be across the whole tourism industry, not just hotels.
Thanks for the info in the other sub thread on labor costs. We’ll see what the prices do and how that impacts travel plans.
Part of the article mentions that visits are already down due to the economic climate, which is also a point you’re making.
Yes, let’s keep supressing wages because things will get more expensive…
Like they haven’t gotten more expensive without the wage increase.
Do you have any idea how small labor costs are compared to the other expenses associated with the operations of a hotel?
No. Please provide an estimate of the percent of the expenses which is labor.
According to the American Hotel & Lodging Associations’ 2016 State of the Industry report, the combined total of salaries, wages, contract labor, bonuses, and payroll administration is ~40% of total hotel operating costs.
Note that this figure also includes salaries, bonuses, and payroll administration. One could double the wages of hourly employees and the cost of a night’s stay would never increase more than 20%.
Just to add more detail, for hotels I’m familiar with the general manager makes $150-200k or more while front desk and housekeeping staff make about $12/hr.
A hotel not having enough, or detailed employees is a major cause of low hotel ratings. So having happy and skilled employees means the hotels will have better raises.
That works out to an annual salary of about $62,500 for a full-time employee and my intuition is that the marginal value of the lowest-paid hotel employees to their employers is a lot less than that, but the nice thing about this being a local law is that LA can experiment on itself and the rest of the country can watch and learn. If this works well, other cities can do the same thing and if this doesn’t then the harm is relatively limited.
(I noticed that the law only applies to hotels with over sixty rooms. I already stay exclusively in Airbnbs when I travel because that’s cheaper. Is LA also one of those cities making it difficult to run an Airbnb or is this going to make large hotels even less competitive in that regard?)
I would HOPE they’re making it difficult to run an AirBNB, fucking plague on the housing market, and they support their Nazi best friend Musk
AirBnB and such is raising the price of housing.
It makes sense to increase taxes or something if a city has more tourism than is desired and wants to reduce it — some cities in Europe have imposed various forms of taxes on tourists recently, when they’ve had more tourism than the locals are willing to put up with. Makes sense then, since it’s a finite resource being consumed.
I kind of doubt that Los Angeles is in that position, but I dunno what the politics are behind that, and I guess it could be the case.
In Europe’s case, my guess is that one could restructure the cities for more tourism throughout — Orlando, Florida, does more people a year than even the much-more-populous Paris, which is the top destination in Europe.
Orlando Welcomed 75.3 Million Visitors in 2024
https://roadgenius.com/statistics/tourism/france/paris/
The 2024 forecast expects a return to the 50 million visitor mark, boosted by the Paris 2024 Olympic Games.
But Orlando was also designed around being a tourist destination, and a lot of the cities in Europe upset about tourism load weren’t and I’d guess don’t want to redesign around it.
EDIT: I’d also add that Los Angeles County has been shrinking in population for a while, so I’d be hesitant to impose more costs in their specific case. Let me go find a graph.
kagis
https://www.census.gov/quickfacts/fact/table/losangelescountycalifornia/PST120224#PST120224
Yeah, lower than it was in 2010, even.
