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Unwise meddling

If the city wants to attract business, it should repeal the hotel wage law and stay out of private labor disputes.

January 02, 2008

An appeals court upheld Los Angeles' special wage mandate on a handful of LAX-area hotels last week, but that only means that the City Council's clever maneuvering didn't violate election laws. City meddling in one type of business in one part of town remains unfair and unwise -- and very bad policy.

This interference with the hotel business in the so-called Gateway to Los Angeles has nothing to do with the "living wage" law the city adopted more than a decade ago. That law applies to city contractors, many of whom once paid their workers poverty wages just to be able to afford to underbid competitors. City Hall's buying clout and its taxpayer dollars, it was argued, drove the area's wage spiral downward. Living wage proponents claim that today City Hall contracting drives wages up because only companies willing to pay their workers at least $9.39 an hour with benefits (or more without benefits) can sell goods and services to the city.

Economists may spar over whether the living wage law hurts more than helps, but it is beyond dispute that any company unwilling to meet the city contracting standard can simply choose not to bid for city business.

It's a far different matter to tell private hotels already operating in Los Angeles -- with no interest in seeking city contracts -- that from now on they must pay their workers according to City Council dictates or else shut their doors and get out of town. The supposed justification is that the hotels thrive only because they stand next to the city-owned airport. So who's next? The council may as well argue that any supermarket, bookstore or frozen yogurt shop makes money only because it's next to a city-maintained street. If Los Angeles' elected officials intend to impose a city minimum wage, business by business and neighborhood by neighborhood, they should come out and say so -- and then allow a serious discussion about the ramifications of such a policy for the local economy and politics.

In fact, the council picked off LAX-area hotels because Unite Here, the hotel workers union, has so far been unable to unionize them. Most council members owe their election at least in part to the Los Angeles County Federation of Labor and its dynamic leader, Maria Elena Durazo -- who just happens to also be the former leader of the local Unite Here union. The council ostensibly answers to voters but too often gets its marching orders from Durazo.

Council members repealed an earlier hotel wage law last year when owners gathered enough signatures to go to the voters. Last week, the court upheld a cleverly modified substitute law because it included new provisions such as -- in a stroke of irony -- a commitment to spend $50,000 in taxpayer money to study how to attract business to the area.

Here are some suggestions for attracting business, and we offer them for free: Repeal the hotel wage law, butt out of private labor disputes and stop spooking companies with random fiats about what they must pay their workers.

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