On May 14, the Los Angeles City Council approved a proposal requiring hotels with more than 60 rooms and companies providing business at Los Angeles International Airport (LAX) to pay their workers a $30 minimum wage by 2028.
This is a significant hike from the current minimum wage of $17.81 per hour. The increase will begin at $22.50 per hour on July 1, 2025, and increase by $2.50 each year until the rate reaches $30.00 per hour on July 1, 2028.
RELATED: WATCH: How Much is Enough? What Should the Federal Minimum Wage Be?
The Post Millennial reports that the City Council approved the measure in a 12-3 vote. The majority said that the hotel industry is experiencing a surge in demand due to the wildfires displacing people and their homes. So, they argue that businesses must pay their workers more as their profits and the city’s expenses increase.
“For too long, the workers who make this city run have been treated as disposable,” said LA City Councilman Hugo Soto-Martinez. “This ordinance makes it clear if you work in this city, you deserve to live in this city – with dignity, healthcare, and a living wage.”
However, others like LA council member Monica Rodriguez contend that the bill will harm workers by causing hotels and airport businesses to cut staffing.
“[It is] a significant wage and health benefits increase overnight that will inevitably result in higher hotel rates, reduced hours for hotel workers, and job losses not just in hotels but across LA businesses that rely on tourism,” Rodriguez said.
In the public sector, LA’s City Hall is already considering staff cuts to cover the cost of employee raises, facing 1,600 expected layoffs. She said the same will happen in the private sector if the bill goes through.
Economist Thomas Sowell illustrates a historic example of the folly of the minimum wage. Before the minimum wage existed in the 1930s, black unemployment was lower than white unemployment. When the minimum wage was introduced, black unemployment began exceeding that of whites. The blame for the sudden increase in black unemployment was not education, skills, or racism, but the minimum wage.
Rodriguez and LA business owners recognize Sowell's warnings of how the minimum wage harms the most vulnerable workers. These workers are the least skilled but struggle the most financially. Meanwhile, they compete against highly skilled workers who have fewer financial struggles. A significant minimum wage increase sounds wonderful for vulnerable workers. However, this increase makes it harder for businesses to pay their workers and forces them to cut staffing. The most vulnerable workers get fired first. Ultimately, the minimum wage works against the very people demanding it.
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