Amid Trump trade war, L.A. urged to hold off on wage hikes for tourism workers

Yahoo

07-05-2025

Five months ago, the Los Angeles City Council endorsed a plan to boost wages for airport and hotel workers to $30 per hour by 2028 — just in time for the Olympic and Paralympic Games in the city — while also requiring new healthcare payments.
For some in L.A.'s tourism industry, that moment feels like another era.
Since then, President Trump has launched a trade war, which in turn sparked a major drop-off in travel from Canada and other nations. The city experienced a catastrophic wildfire, then a massive budget crisis. By the end of March, passenger traffic at Los Angeles International Airport had fallen nearly 5% compared with the same period the prior year.
Now, with the first of several wage hikes scheduled to go into effect on July 1, a coalition of L.A. business leaders is urging the council to hold off on the minimum wage increases, saying they will devastate an industry that was already struggling.
"Two hotels have closed. More are starting to reduce services and lay off workers," Rosanna Maietta, president and chief executive of the American Hotel and Lodging Assn., said at City Hall last week. "If this ordinance is enacted, we expect more hotels to close."
Stuart Waldman, president of the Valley Industry and Commerce Assn., offered an equally dire warning, saying the wage increases will cause "irreversible damage" to local tourism. With the entertainment industry in crisis and construction of new homes down 57% this year, L.A.'s political leaders cannot afford to lose another sector of the local economy, he said.
"L.A. has destroyed housing production. Now they're coming for tourism," Waldman said in an interview.
Despite those warnings, the council's economic development committee signed off on the tourism wage ordinance Tuesday, setting the stage for a vote by the full council this month. If the proposal is approved without changes, airport workers and employees of hotels with 60 or more rooms would see their hourly minimum wage climb to $22.50 in July, $25 in 2026, $27.50 in 2027 and $30 in 2028.
Read more: L.A. City Council backs $30 minimum wage for hotel and LAX workers in 2028
In addition to those increases, the proposal would require that, starting Jan. 1, those same workers would receive $8.35 per hour for their healthcare coverage. (Employers already providing healthcare would need to make sure the coverage has a value of $8.35 per hour, or else make up the difference.)
Councilmember Hugo Soto-Martínez, a onetime hotel union organizer who now serves on that committee, said he sees no reason to change course.
"I understand things look different than they looked a year ago," he said in an interview. "But the reality is, we live in a city people cannot afford. They don't have health insurance. The effect it has on their family and children and their quality of life has been going on for way too long."
Kurt Petersen, co-president of Unite Here Local 11, said it was hypocritical for business leaders to fight wage increases at the same time they were pressing the council to spend tens of millions of dollars preparing for a renovation of the Los Angeles Convention Center. That vote was cast only last month.
Hotel owners at unionized properties already showed last year that they could afford higher wages, with some providing increases of $10 per hour during contract negotiations, Petersen said.
"They just don't want to pay their workers, that's what it is. So they come up with every excuse in the book to keep the money to themselves," he said.
Los Angeles has four municipal minimum wage laws. Hotel workers have the highest wage — $20.32 per hour — compared with the basic minimum wage for the vast majority of workers, $17.28 per hour.
Employees of contractors at LAX, such as airlines and concession businesses, have a $19.28 hourly minimum wage. However, they also receive a minimum healthcare payment of $5.95 per hour, which boosts their overall hourly rate to $25.23.
Under the council's proposal, workers at hotels with 60 or more rooms would see their minimum wage go up by 48% over 3½ years. At LAX, skycaps, cabin cleaners and other workers would receive a minimum wage increase of nearly 56%.
Hugo Ortega, a line cook for Hilton Garden Inn LAX and Holiday Inn LAX, said the package of pay increases will help him pay the rent and provide for his three children. Ortega, 52, works 70 hours a week as a cook and a maintenance engineer.
"I have to be doing two jobs to keep my family going," he said in an interview.
Backers of the higher wage have repeatedly pointed to a city-commissioned study finding that higher incomes for tourism workers would stimulate the region's economy.
In recent months, the fight over the minimum wage has run headlong into the crisis over the city budget, which relies each year on more than $300 million in hotel tax revenue to pay for basic services such as police, firefighters and paramedics.
Mayor Karen Bass, faced with a nearly $1-billion shortfall for 2025-26, recently recommended laying off about 1,600 city workers, including staffers at the Los Angeles Police Department, the Bureau of Sanitation and the Department of Transportation. Since then, some council members have warned that a dramatic hike in wages will lead to fewer hotels overall — and diminished tax revenues.
"We are moving forward a 50% increase in wages and healthcare costs while our entire tourism economy is underwater," said Councilmember Traci Park, the only committee member to vote against the wage hike Tuesday. "And that is directly impacting our sales taxes, our business taxes, our [hotel] taxes and everything else that is impacting our city budget."
In recent months, the council's budget committee has been hearing increasingly gloomy assessments of the city's tourism and aviation industries. City Administrative Officer Matt Szabo, a high-level budget official, warned the committee last week that flight bookings to the U.S. from major European cities have dropped by double digits this year.
Read more: Bass proposes laying off about 1,650 city workers, a quarter of them civilians at LAPD
Szabo, citing figures from aviation data provider OAG, said bookings from Canada were faring even worse, dropping by more than 70% this year.
'Nowhere are we seeing the impacts of federal policies more immediately than in tourism,' he said.
Trump, shortly after taking office, hit Canada and Mexico with steep tariffs, some of which remained in place even after he announced a 90-day pause on his trade war. Canadians, furious over Trump's threats to annex their country, began boycotting American products and canceling travel to the U.S., including to popular winter destinations such as Palm Springs.
On Monday, the budget committee heard from John Ackerman, the top executive at Los Angeles World Airports, who reported that concession businesses at LAX are experiencing major financial distress — and may need additional financial help from the city.
"If they can't succeed, I think it's going to be challenging to replace them with someone who is miraculously going to do better," Ackerman told the committee. "So it could put us in significant jeopardy. For us, long term, that would likely lead to less airline flights and less revenue, and it becomes kind of a downward spiral."
Gov. Gavin Newsom announced Monday that Visit California, the tourism marketing nonprofit, is forecasting a 1% drop in visitors to the state this year, the first decrease since the pandemic. Much of that is being driven by a projected 9.2% decline in international visits, the agency said.
The tourism group attributed the reduction in large part to "weakening consumer sentiment" and a strong U.S. dollar that makes travel more expensive for tourists from other countries.
Elisa Valencia, who works for the airline catering company Flying Food Group, said her $20.76 hourly wage is not nearly enough to provide for her three children in Michoacán, Mexico. Valencia, 34, rejected the idea that turmoil in the travel industry is a reason to deny workers a wage boost.
"Tariffs are affecting everybody, not just companies," she said. "Buying everyday food and gas is getting more expensive."
Times staff writer Sandra McDonald contributed to this report.
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This story originally appeared in Los Angeles Times.