The Burke Group
The Burke Group
Client Login Arrow

Back to Industry News
Industry Links
TBG Press Releases

The Fight for $15.37 an Hour
Saturday, November 22, 2014

How a Coalition Pushed for a Hotel Workers' Minimum Wage


Most Sunday mornings last summer, Julia Gould set up a table at the Hollywood Farmers Market. Alongside stalls selling shiitake mushrooms, free-range poultry and orange-blossom honey, she was selling an idea: a $15.37-an-hour minimum wage for the city’s hotel workers — more than twice the federal minimum wage and one of the highest minimum wages in the nation.

As shoppers wandered past, Ms. Gould asked them to sign a petition calling on the Los Angeles City Council to approve the proposal. She also urged them to write on a whiteboard their reasons for supporting the higher wage. One shopper wrote that “to live a healthy life, you need a living wage,” while a woman carrying a Starbucks coffee scribbled that she supported the idea “because rent is expensive.”

A second community organizer photographed these shoppers and their hand-scrawled signs and then posted those pictures on Facebook and Twitter, steering them to Mitch O’Farrell, the City Council member who represents Hollywood. Mr. O’Farrell had questioned the wisdom of the $15.37 wage proposal, fearing that it would force hotels to lay off some of the city’s 17,000 hotel workers. “We were trying to show him that his constituents cared about this,” Ms. Gould said.

Her politicking was one small part of a campaign orchestrated by one of the nation’s leading advocacy groups for low-wage workers: the Los Angeles Alliance for a New Economy, or Laane. Harold Meyerson, a Los Angeles native and syndicated columnist, has called the alliance “the nation’s most innovative and effective force for raising the incomes of low-wage private sector workers.” Laane estimates that its efforts have improved wages or benefits for 121,000 workers and yielded them $2 billion in economic benefits.

As labor unions have dwindled in numbers and influence, more than 200 nonunion worker advocacy groups, including Laane, have sprouted across the nation, struggling to find new ways to lift wages and improve working conditions. Laane, in particular, pioneered the idea of having unions join forces with advocates for immigrants, women, African-Americans and the environment — and using their combined power to influence local lawmakers.

Change, says Roxana Tynan, Laane’s executive director, comes one city at a time. “Given the dysfunction of the federal government,” she said, “our sense is, in a country as huge and complex as ours, cities should serve as the laboratories for change.”

Laane is not well known outside Los Angeles, but its achievements have been copied in many other cities. The group persuaded the Los Angeles City Council to enact one of the nation’s first living-wage laws in 1997 — the current version requires pay of $12.28 an hour for workers employed by city contractors or companies receiving city tax breaks. More than 100 cities and counties have adopted similar laws. In 2001, when developers sought to build a hotel and entertainment complex near the Staples Center, Laane and its community partners pressured them into agreeing to pay a living wage (currently $12.28 an hour) and to hire workers from low-income neighborhoods. Activists in Pittsburgh, San Diego and Austin, Tex., have won similar “community benefits agreements” from developers.

In a 2007 rally near Los Angeles International Airport, workers carried a quilt remembering workplace deaths and injuries at hotels. Credit Laane

“We were pursuing a very capitalistic notion,” said Madeline Janis, Laane’s first executive director and now its national policy director. “Public money is an investment on behalf of the community and taxpayers. We’re saying that the developers who receive the benefit of public investment should give a return on that investment to the community.”

Amy Kenyon, a program officer at the Ford Foundation, a longtime funder of the group, said: “They’re at the leading edge of a movement that seeks to make sure that government spending and infrastructure work benefits workers.”

Since it was founded two decades ago, Laane has focused on increasing pay for low-wage workers in Los Angeles. But only in the last few years have inequality and three decades of wage stagnation at the low end of the economic ladder firmly entered the national conversation.

In midterm elections this month, voters in four Republican-leaning states — Alaska, Arkansas, Nebraska and South Dakota — and in the heavily Democratic city of San Francisco approved higher minimum wages. And while President Obama’s proposal to raise the federal minimum to $10.10 from $7.25 has stalled, some business leaders support it, saying low wages hurt business because consumers don’t have enough money. The C.E.O.s of Costco and the Container Store have endorsed a $10.10 minimum, while the Gap is voluntarily raising base pay to $10 an hour by June.

Laane, however, was seeking far more than that for hotel workers. It argued that Los Angeles is one of the nation’s most expensive places to live and that $15.37 is the bare minimum for a decent life for workers and their families.

Unlike labor unions, Laane doesn’t bargain with corporations — even when its work affects a private industry. Rather, it uses its power to influence the political process. Which is why Julia Gould helped to gather 8,000 signatures last summer. And why Councilman O’Farrell was suddenly getting a flood of emails and visits from local priests, ministers and rabbis.

Seeds of a Campaign

Laane’s organizers hatched plans for the higher hotel wage 20 months ago. Its goal was not only to have the City Council approve the bill, but to do so in a landslide vote. In some ways, the campaign was a practice run toward a bigger goal: a citywide minimum wage. Laane wants $15 an hour; Mayor Eric Garcetti has proposed $13.25. The City Council is expected to vote on the proposal next year.

Laane’s confidence grew out of a 2012 referendum in which voters in Long Beach, a city of 470,000 just south of Los Angeles, overwhelmingly approved a $13-an-hour minimum for hotel workers. It was highly unusual to have a referendum to raise wages in just one industry.

“We realized that if we could do this in Long Beach, then we could do this in L.A. because L.A. has much more of a tradition of raising standards for workers,” said James Elmendorf, a Laane deputy director.

Laane decided to focus on the hotel industry, Mr. Elmendorf said, because such a high percentage of its workers live in poverty. In Los Angeles, hotel housekeepers earn close to $10 an hour, on average, according to the Economic Roundtable, a research group, while the city’s hotel industry is booming thanks to the many business travelers and tourists.

To win big in the City Council, the campaign’s organizers knew they had to rally numbers as well as emotion. In the months before the campaign went public, Laane’s staff researchers put together a 34-page report to make the case that the higher wage would be good for the city’s economy.

Critics argued that the study’s methods were flawed and its numbers exaggerated, but Laane put the report to good use in street-level politics. Coupled with an online, interactive map, the report detailed the number of hotel workers who lived in each council district and estimated how a wage increase would benefit each district. The report said, for instance, that 675 hotel workers lived in Mr. O’Farrell’s district and that a $15.37 wage would lift their total pay by $3.4 million a year and increase consumer spending in the district by $1.9 million.

The hotel industry commissioned an analysis, which estimated that the measure would lead to a loss of 1,400 hotel jobs. “This is a drastic pay increase,” said Bob Amano, executive director of the Hotel Association of Los Angeles. “Think what this will mean for the potential investors who are looking at developing hotels.”

To kick off Raise L.A., the campaign to raise the hotel minimum, Laane had a news conference at City Hall in January. Three council members joined Laane’s executive director and hotel union leaders in praising the idea, while representatives of dozens of groups — including the American Civil Liberties Union, the Natural Resources Defense Council and the Jewish Labor Committee — lent support.

From February on, a stream of clergy members — often joined by hotel workers — knocked on council members’ doors.

Magdali Martinez, a hotel room attendant, said she was “overjoyed” at the City Council’s recent vote to raise the hotel minimum wage to $15.37 an hour. Credit Emily Berl for The New York Times

This kind of coalition-building has been central to Laane’s strategy since it was founded in 1993 by a husband-and-wife team, along with Ms. Janis, to serve as labor’s bridge to community groups. At the time, that couple — Miguel Contreras and Maria Elena Durazo — were officials in the hotel workers union. “We saw that it was hard to win through the traditional way of unionizing — there was so much employer opposition,” Ms. Durazo said. “We needed a new entity to look at things differently.”

While Laane and the Los Angeles labor movement have pursued the coalition-building strategy for two decades, the A.F.L.-C.I.O., the nation’s main union federation, acknowledged only last year that organized labor had grown so weak that it needed to ally itself with other groups to win fights in Congress or in the states. In this way, many in the beleaguered labor movement look to Laane as a model.

Laane increasingly describes itself as a labor-environmental organization. It pushed for an overhaul of the city’s waste-hauling industry, to take effect in 2017: To win contracts, haulers must pledge to increase the amount that is recycled, use low-pollution trucks, pay a living wage and improve safety.

Critics argue that Laane’s strategy sometimes hides its real intent. To help restore manufacturing jobs in California, Laane persuaded the transportation authority in Los Angeles to buy hundreds of buses and rail cars from proposed local factories — a move that could create 800 jobs — instead of importing those vehicles from Asia.

But Laane and its union allies then brought objections to one manufacturer’s plans to assemble rail cars locally, contending that the company was skirting environmental rules. Gary Toebben, president of the Los Angeles Chamber of Commerce, asserted that the objections were really meant to pressure the manufacturer not to fight unionization. Laane and organized labor said the environmental objections were sincere, though they did support a clause that any manufacturer would not oppose unionization. Laane insisted on a similar union-neutrality provision in the waste-hauling contracts.

“They have done a good job of finding ways to use city rules and regulations to unionize the work force,” Mr. Toebben said.

Carol Schatz, chief executive of the Central City Association, a powerful business group, sees Laane as a blight on the city’s business climate. “Laane purports to combat poverty and promote new jobs, but it only supports union jobs and it will actively help to kill new business projects that are nonunion,” she said. “For someone without a job, any job can set them on a pathway out of poverty.”

Ms. Tynan, Laane’s executive director, argued that the critics have it all wrong. Laane, she said, is “pro-growth, not anti-business.” And while Laane is pro-union, she said, a vast majority of the workers helped by its policies are not union members and most probably never will be.

“This whole idea that raising wages is a left idea is nutty,” Ms. Tynan said. “You can’t make an economy move if people don’t have money to spend.”

‘The Heart Wins Out’

Bernard Parks, a member of the City Council, doesn’t hide his disdain for the $15.37 wage idea. He said that it was inevitable that hotels would be squeezed and that some would lay off workers if the proposal became law. In 2007, Laane engineered a special base wage for hotels near Los Angeles International Airport. But according to a study conducted by PKF Consulting, a hotel industry analyst, that wage increase resulted in job cuts, especially at hotel restaurants.

But several studies by economists at the University of California, Berkeley, found that increases in the minimum wage in San Francisco — it’s currently $10.74 — had no measurable effect on employment. Their studies found that companies absorbed the costs through higher worker productivity, lower turnover and modest price increases. (San Franciscans voted earlier this month to raise the minimum wage to $15 in several steps.)

Still, when the Los Angeles City Council’s chief legislative analyst and the city’s chief administrative officer in June reviewed three studies on the effects of a higher hotel wage in the city, they concluded that some hotel jobs would be lost — and hotel development potentially reduced — but that local wages and economic activity would increase. A $15.37 wage involved “trade-offs,” they concluded, and should be phased in to reduce negative effects.

“The real tragedy of this is that some people are going to lose their jobs,” Mr. Parks said.

Nonetheless, he had no doubt that the proposal would pass. The reason, he said, was that so many council members were indebted to — and allied with — labor.

Los Angeles was long considered the most anti-union city outside the South. For decades, a business establishment dominated city politics. But that began changing around 1990. Oil giants, major banks and aerospace companies based in Los Angeles were taken over or moved away, and with them went many hands-on civic leaders. And hundreds of thousands of Hispanic immigrants were moving to the city.

Mr. Contreras, who helped found Laane, saw labor and these immigrants as the answer to filling the city’s power vacuum. At the time, Hispanics in California were fuming that Republicans had pushed through the anti-immigrant Proposition 187. Mr. Contreras, who became political director of the Los Angeles County Federation of Labor in 1994, saw the opportunity and started mobilizing.

“He saw that in a city of immigrants you don’t have to vote to get involved in politics,” said Peter Dreier, a professor of urban policy at Occidental College. “You can make phone calls and knock on doors.”

And that they did, getting many union members and recently naturalized immigrants to the polls. Bolstered by labor’s foot soldiers, the Democrats regained control of the State Assembly in 1996 — the year Mr. Contreras became head of the labor federation. Over the following years, he and his allies helped elect pro-labor candidates to the Los Angeles City Council and the state legislature. One coup was the election of Hilda Solis, a crusader for labor, to a Congressional seat in 2000; in the Democratic primary that year, she trounced Matthew G. Martinez, a nine-term centrist Democrat, by more than a 2-to-1 margin. (Ms. Solis later became secretary of labor under President Obama.)

Soon, City Council members were courting Mr. Contreras, eager to stay on labor’s good side. He died in 2005, and his widow, Ms. Durazo, later became the labor federation’s head. Like him, she used its considerable power to advance Laane’s agenda.

Though politically shrewd, the Los Angeles labor movement sometimes makes bad bets. In the City Council election, labor backed Mr. O’Farrell’s opponent in the primary even though Mr. O’Farrell considered himself friendly to labor. He was upset that unions had snubbed him and instead backed a candidate who said unions would “be on the inside” if he won. “They tried to bury me,” Mr. O’Farrell said.

Now, eager to rack up an overwhelming majority in the push for a $15.37 wage, Laane wanted Mr. O’Farrell’s vote.

With the Chamber of Commerce denouncing the proposal, Laane supporters knocked on the doors of thousands of small businesses to seek their support and to show that not all businesses were against the plan. Ultimately, 750 small-business owners signed a petition backing the higher wage, with hundreds placing “Raise L.A.” stickers in their windows.

On the day in late September when the vote was scheduled, hundreds of hotel workers filled the council’s ornate, high-ceilinged chamber. In a tense speech minutes before the final vote, Mr. O’Farrell again told of his ambivalence, noting the study that predicted jobs would be lost. He nonetheless indicated that he would vote yes.

“At the end of the day, between the intellect and the heart,” he said, “the heart wins out.”

The vote was called, and the council approved the bill, 12 to 3. The crowd erupted.

Afterward, Mr. O’Farrell denied that the pressure campaign had affected his vote. He said he ultimately backed the bill because it “lifts people who work very hard” and because “I have a lot of constituents who are working mothers, including many who work in the hotel industry.”

One working mother at the council session was Magdali Martinez, a hotel room attendant earning $11.42 an hour.

“I’m overjoyed,” Ms. Martinez, 44, a mother of three, said minutes after the vote. “This is really going to help my family. We don’t have enough money coming in. We often have to choose between falling behind on our gas bill or our phone bill.”

Ms. Martinez, whose husband works at an auto body shop, said the 35 percent raise would help send their son to dental school in their native Guatemala.

Mayor Garcetti, who had endorsed the $15.37 proposal early on, signed the wage increase into law in October. His wife, Amy Elaine Wakeland, has served as co-chairwoman of Laane’s advisory board.

“Laane has helped bring a sense of urgency for social justice in a town where people are falling behind,” Mr. Garcetti said.

Many say that without Laane’s spadework, Mr. Garcetti would never have proposed a citywide minimum wage of $13.25 an hour. If it is enacted, the city would have the highest minimum wage after Seattle’s and San Francisco’s. But the citywide plan is facing far more opposition from small business than the hotel proposal did, and the City Council has commissioned a study on the effects of a $13.25 minimum, especially on small businesses.

Laane, meanwhile, is again bringing together a coalition of neighborhood and immigrant groups, unions and environmentalists, to press members of the City Council. So Mr. O’Farrell should expect visits from a few more rabbis and priests.

Minimum Wages: California’s Scorecard

$9 Current statewide minimum wage.

$10 New statewide minimum, to take effect Jan. 1, 2016.

$10.74 Current minimum wage in San Francisco.

$11.05 New San Francisco minimum, to take effect on Jan. 1, 2015, as part of a multistep phase-in.

$12.28 Current Los Angeles minimum for employees of city contractors or companies that receive tax subsidies.

$13.25 Proposed Los Angeles citywide minimum, as endorsed by Mayor Eric Garcetti (would take effect by 2017).

$15 New San Francisco minimum by July 1, 2018 (last step in the phase-in).

$15.37 New Los Angeles minimum for hotel workers, effective July 1, 2015, for hotels with at least 300 rooms; a year later for hotels with at least 150 rooms.

A version of this article appears in print on November 23, 2014, on page BU1 of the New York edition with the headline: The Fight for $15.37 an Hour.

-top of page-

  Home | Labor Relations Consultants | Labor Relations Training
NLRB Elections | Union Avoidance | Union Card Signing | Labor Consultants | Management Audit
Contact Us | Client Login | Privacy Policy | Consultant Login | Sitemap

TEL: 800-77-Burke | All material ©2004 The Burke Group unless otherwise noted. All rights reserved.