Los Angeles Mayor Karen Bass is facing significant criticism following the enactment of a new law that raises wages for hotel workers. According to a recent report, the legislation has already begun to negatively impact the hospitality sector.
The report highlights that since the new wage policy was implemented in September, approximately 650 employees have lost their jobs, and some restaurants have either closed or cut back on their operating hours.
The legislation mandates gradual increases in the minimum wage for hotel workers, eventually reaching $30 per hour in anticipation of the 2026 World Cup and the 2028 Summer Olympics. The wage currently starts at $22.50 and will incrementally rise to $30 by 2028.
Mayor Bass signed the Hotel Worker Minimum Wage Ordinance into law last May, following its approval by the Los Angeles City Council.
Despite being in effect for only six months, a report from the Hotel Association of Los Angeles has already attributed a six percent reduction in jobs and limited operational hours in some hotels to the wage hikes.
This report was based on secondary research, industry analyses, and feedback from hotels directly affected by the new wage structure.
The HALA found that the law was passed during a time of weaker demand, and hotels struggled to accommodate wage increases.
‘The bottom line is the city of Los Angeles has forced a wage and benefits package on hotels that is utterly unaffordable at a time when Californians and Americans are laser focused on affordability,’ HALA President Dr Jackie Filla told Fox News Digital.
Mayor Karen Bass, pictured above on February 28 at the NAACP Image Awards, signed a controversial wage increase into law last year for hotel workers
A new study conducted by the Hotel Association of Los Angeles revealed that the wage increase has caused financial strain and led to job loss. Pictured above is a file photo of Hotel Angeleno
Bass supported the law last year, which went into effect in September. She’s pictured above at a speaking event last June
Filla said the wage increase has not only resulted in job loss, but also restaurant closures within hotels, more expensive parking and construction delays.
She pointed out that many workers who have lost their jobs were working-class people whom the law was initially designed to protect.
Tourism provides over half a million jobs in Los Angeles and ranks among the city’s top five employment sectors.
However, the hotel market in the city has underperformed and has not yet fully rebounded to pre-pandemic levels.
Since 2019, hotel revenue in Los Angeles has only increased by 2.1 percent, compared to 20 percent nationwide.
An unnamed hotelier was cited in the report slamming the city’s hotel industry, claiming it was ‘not in good shape’ due to fewer travelers and decreasing gross revenue.
‘The current administration is doing nothing to help the current operators. They take the operations for granted and the industry and tax base is going to shrink substantially and go the way of the movie industry,’ they said.
Another hotelier said that travelers would ultimately bear the burden of increased labor costs as prices for rooms, meals and services rise to offset the wage bump.
Hotel owners told researchers that the wage increase will result in higher prices for travelers, reduced hours for workers, and terminations. Hotel file photos are pictured
The study estimated that over 600 hotel workers have lost their jobs since the law was enacted. A file photo of the AC Hotel in LA is pictured
The HALA found that of the approximately 650 hotel workers who have lost their jobs since September, around 160 worked in food service, 76 in housekeeping, 37 in parking, 19 in maintenance, 8 in security, 36 as ‘other,’ and 270 as ‘undefined.’
Hotel owners also reported that two-thirds of third-party vendors were planning to raise prices, while 1 in 5 planned to cancel their contracts altogether.
Bass previously supported the measure, advocating that hotel workers deserved to make a living wage and receive healthcare benefits.
A study by Go Banking Rates, released last year, noted that data from Zillow and the Bureau of Labor Statistics suggested that people need to earn around $194,000, or $93 an hour, to live in Los Angeles ‘comfortably.’
The Daily Mail has reached out to Mayor Bass’s office for comment.
