Facing pressure, LA City Council looks to delay minimum wage boosts for tourism workers

The Los Angeles City Council is considering a contentious plan to roll back minimum wage increases for tourism workers, as the city faces the looming prospect of a measure to repeal the business tax that could financially ruin the city landing on the November ballot.

The move, approved in a 10-5 vote Wednesday, is an about-face for the council, which voted just last year to increase the minimum wage for airport and hotel workers in the city to $30 an hour by 2028.

Now, the council is considering a plan to delay that boost until 2030, slowing down the pace of annual increases to the minimum wage. City leaders are hoping to stave off a tax repeal that would slash the city budget and lead to major cuts and layoffs. Business leaders behind that ballot initiative garnered enough signatures to get it placed on the ballot but could still withdraw it.

Council President Marqueece Harris-Dawson said Wednesday the city was in ongoing discussions with labor and business leaders to broker a compromise and that he expected the proposal the council was considering would change as those discussions continue.

" There is a commitment on both sides to continue to negotiate," Harris-Dawson said. "It's our role as a council to mediate between two opposing forces: the people who work for us and are residents of this city and the people who have businesses and who, in many cases, are residents of this city."

It's a maneuver hotel workers called a "shakedown" at the City Council meeting, where public comment lasted more than two hours, as dozens of people implored the council not to delay wage increases.

" I would expect my councilmember to stand up for working Angelenos, not help giant companies take money out of our pockets," said Jordan Long, a bartender at LAX who said he lives in Harris-Dawson's district. " Do not be fooled by corporate threats against the city budget."

Business leaders behind the measure to repeal the business tax told LAist they were open to pulling the measure off the ballot if the council goes through with delaying pay bumps.

" This is a huge step in that direction," said Nella McOsker, president of the Central City Association, one of the backers of the measure.

Stuart Waldman with the Valley Industry & Commerce Association told LAist that business groups decided to advance their ballot measure after unions wouldn't broker a deal with them directly.

"The business community has taken a page out of the union playbook to play hardball," he told LAist.

Council members Eunisses Hernandez, Ysabel Jurado, Nithya Raman, Hugo Soto-Martinez and Katy Yaroslavsky voted against the motion.

"We're talking about some of the lowest paid workers in one of the most expensive cities in America," Hernandez said. "This motion sends a terrible message that corporate pressure matters more than workers' lives."

The council has directed the city attorney to draft an ordinance to delay minimum wage increases, and will have to vote again on the proposal. Council President Harris-Dawson noted multiple times that negotiations are ongoing and the proposal could change.

A long political struggle over the 'Olympic wage'

The ordinance to raise minimum wages for tourism workers was celebrated as the "Olympic Wage" and was pegged to the arrival of the 2028 Games in Los Angeles. But a battle to upend it started as soon as the city council passed it last year.

The struggle started when a business group backed by Delta and United Airlines launched a referendum to repeal the wage increase. That effort failed to gather enough signatures.

Unite Here Local 11 responded with its own raft of ballot measures, including raising the minimum wage citywide and requiring Angelenos to vote on building new hotels and event center developments.

That's when business interests introduced their ballot measure to repeal the city's business tax, except for cannabis businesses. That measure gathered enough votes to make the ballot.

What would repealing the business tax do to the city?

The ballot initiative would eliminate the city's gross receipts tax, except for cannabis businesses. That tax is a major revenue source for the city, and will bring in more than $800 million this fiscal year. The tax makes up 10% of the city's general fund, according to a report by the city administrative officer. If passed, tax cut would take effect in 2028.

City Administrative Officer Matthew Szabo warned Wednesday that the council in a report that the measure could send the city into fiscal ruin and lead to major cuts.

"The City would be forced to implement austerity measures far more severe than those seen during the Great Recession or the COVID-19 pandemic," Szabo said.

Councilmember Imelda Padilla put it more strongly.

"This would cause an economic apocalypse for the city," she said to her colleagues.

While the city weighs its options, some workers told the council that their financial plans would be derailed if expected wage increases are delayed.

" I am counting on the wage increase this summer to help me provide for my daughter," said Erick Cruz, a cook at LAX. "That increase is not extra money. It is money for rent, diapers, food, gas, and basic things a young family needs to survive."

Harris-Dawson said that the city council will revisit the issue next Tuesday.