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Withdraw the wage law

A business-unfriendly ordinance forcing LAX hotels to pay workers more could cost the city millions.

January 03, 2007

THE LOS ANGELES City Council last week learned a valuable lesson: When you take a gratuitous bite out of a local industry, the business community may well bite back. Unfortunately for Los Angeles taxpayers, that lesson may prove expensive.

The council, whose members are largely beholden to local labor unions, in November extended the "living wage" ordinance -- which mandates that companies doing business with the city must pay their workers at least $10.64 an hour in wages and benefits -- to a dozen hotels near the airport. The thin justification for the move was that the hotels benefit from their proximity to a city-owned facility -- LAX -- and therefore should comply with the same rules as city contractors.

Business groups rightly cried foul and have since collected twice the number of signatures needed to take the matter to voters. Assuming that the petition is verified by the city clerk, the council will have to decide whether to rescind the wage extension or submit it to the ballot, which could cost taxpayers anywhere from $100,000 (if it's part of another citywide election) to $6 million (if it's a one-off).

The council should stop throwing good money after bad policy and instead withdraw the law. The living-wage extension is an unwarranted and capricious government intrusion into private industry that could chase businesses out of Los Angeles while encouraging hotels to raise prices or lay off workers. It reinforces the growing notion that City Hall is not friendly toward employers.

The council has a history of backing away from its more far-reaching measures in the face of an electoral threat. In 2003, City Hall passed an ordinance banning lap dancing, then decided to leave the strippers alone when adult nightclubs gathered enough signatures to force a ballot measure. More recently, the council approved $290 million in subsidies and loans for the construction of a hotel near the L.A. Convention Center, then was threatened with a signature drive by the owner of an existing downtown hotel who claimed the city was unfairly aiding a competitor. Mayor Antonio Villaraigosa headed off a ballot measure by brokering a deal in October 2005.

The LAX hotel dispute puts Villaraigosa in a pickle. His pact on the Convention Center hotel, combined with a successful intervention in June 2005 that averted a union lockout at seven other Los Angeles hotels, have positioned him as a valuable friend of the tourism industry. Yet his many supporters in organized labor expect him to hang tough on the living-wage ordinance, which they'd like to see extended still further. Caught between two constituencies, the mayor should ignore both and do what's right for the city.

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