Poverty jobs in LA’s hotels are exacerbating the problem of poverty throughout the city. Workplace standards for tens of thousands of LA’s hotel workers remain among the lowest of the city’s major employment sectors. Hotel workers are a key piece of LA’s highly successful tourism industry, but maintaining standards for workers has been largely ignored as hotel operators have focused intensely on boosting their bottom lines by increasing worker productivity.
Establishing a minimum wage for workers in LA’s large hotels will directly address the problem of growing poverty in the city of Los Angeles and will stimulate our local economy by an estimated $71 million per year in increased local consumer spending and related economic activity.
Raising the minimum wage will improve the economic well-being of Rhode Islanders and strengthen the state’s economy. Giving the lowest paid workers a raise will improve their economic security and help curb the growth in income inequality, which has been significant in the Ocean State over the past three decades. Putting more money in the pockets of workers will also put more money in the cash registers of locals businesses and create jobs in Rhode Island.
Minimum wage workers are not able to meet their basic needs. The Rhode Island Standard of Need, a study that documents the cost of living in the Ocean State, shows that a worker earning the state’s current minimum wage of $7.75/hour falls short of meeting his or her basic expenses by $474 each month. Furthermore, while Rhode Island’s minimum wage is slightly higher than the federal minimum wage, it still leaves a family of three well below the federal poverty line ($16,120 versus $18,480).
Local governments are increasingly turning to living wage policies as a means to improve job quality for low-income workers. To date, more than 100 local governments around the country have passed living wage ordinances. Living wage laws set wage and benefit standards for workers employed by government contractors or other firms that have a financial relationship with the government. These laws have, in part, been a response to the stagnation of state and federal minimum wages, which have failed to keep pace with
inflation. In addition, these laws represent a reaction to the growing interest in contracting out city services as a means to cut costs, a strategy that advocates argue penalizes the low wage workers who perform city services. However, despite the prominence and continued growth in the number of living wage ordinances, only a handful of retrospective studies of firms have been published on the impacts of these laws. This study is the first to combine a random sample survey of affected firms and workers, a control group analysis of low-wage employers, and a matched firm and worker dataset. These elements make us confident that our survey results both isolate the effects of the living wage and accurately represent the experiences of living wage workers and firms.
As living wage laws have grown in popularity, so have debates about their effectiveness. Although these laws typically raise standards for just a small segment of jobs in a local labor market, they can focus public discussion on the issue of job quality. Proponents of
the law argue that the city should not be a low-wage employer, and that living wage policies put much-needed money in the pockets of low-income families, while also setting standards that have an impact beyond those directly affected by the law. Business groups have made similar arguments as those made against minimum wage hikes: that living wage laws will result in job reductions, harm small businesses, and will hurt the very population the policy is intended to serve. This study evaluates the experience in Los Angeles in order to determine what actually occurred after the living wage went into effect in that city, as well as provide broader lessons that contribute to the national debate.