Wage growth in the UK cooled slightly over the summer, as unemployment ticked up marginally.
Average wage growth was 4.7% in the three months to August, down from 4.8% over the three months to July, according to new data from the Office for National Statistics (ONS).
The national unemployment rate rose slightly from 4.7% to 4.8%.
Analysts said the data indicated that the UK jobs market was stabilising after a year of volatility.
Job vancancies fell by 9,000, or 1.3%, in the three months to September, and the ONS said this was the 39th consecutive period in which job openings had fallen compared to the previous three months.
Liz McKeown, the ONS’s director of economic statistics, said: “After a long period of weak hiring activity, there are signs that the falls we have seen in both payroll numbers and vacancies are now levelling off.”
Youth drive unemployment
Ms McKeown said the ONS was seeing different patterns among age groups, adding “the increase in unemployment was driven mostly by younger people.”
There was a quarterly drop in the number of people who were economically inactive because they were students or retired, but this was largely offset by a rise in economic inactivity for other reasons, including long-term illness and for other reasons.
Danni Hewson, AJ Bell’s head of financial analysis, said the figures were creating “a clearer picture of a labour market that’s soft, with younger workers facing the biggest challenges”.
She said the decision by Chancellor Rachel Reeves to raise employer national insurance “made it more expensive for employers who had lots of part-time staff, many of them being younger workers dipping their toe in the labour market for the first time”.
“The fact the ONS has found that the rise in unemployment in the three months to August was driven mostly by younger people suggests those warnings have become reality,” Ms Hewson said.
“Making it harder to find these types of jobs could have a marked impact on their relationship with work in the future.”
The ONS has said the unemployment rate should be treated with caution and it is taking additional steps to address concerns about the quality of the data.
‘Steady labour market’
Annual growth in workers’ average earnings was 6% for the public sector and 4.4% for the private sector.
Private sector earnings growth was the lowest in four years but was still ahead of inflation.
The ONS said the public sector annual growth rate is affected by some public sector pay rises being paid earlier in 2025 than in 2024.
Chris Hare, the senior UK economist at HSBC, said the data indicates “a fairly steady labour market”.
“I think we’re probably seeing fairly soft demand for labour in the economy,” he said, adding that it should lead to “a gradual easing in broader cost pressures in the labour market and an easing in wage growth”.
The number of people who were made redundant between June and August increased from the same period last year, to 3.8 per 1,000 employees in June to August 2025.
The ONS also revised the previous figure for wage growth, bringing it up from 4.7% to 4.8%.
This figure will likely be used to calculate the increase to the state pension for next year.
Under the triple lock policy, the state pension is increased by the highest of wage growth, inflation or 2.5%.
‘Paltry’ real wage growth
Inflation currently stands at 3.8%, meaning that real wage growth – how much better off workers are when accounting for rises in the cost of living – is 0.9%.
Responding to the figures, the Liberal Democrats said that real wage growth is barely keeping up with inflation.
Similarly, the Resolution Foundation said real wage growth was “paltry”, and that real weekly wages have only increased by £1.50 since last September — “barely enough to cover the cost of a Greggs sausage roll”.
Charlie McCurdy, an economist at the think tank, said: “The UK’s longstanding weakness in the jobs market has finally caught up with pay packets.
“The deteriorating labour market, coupled with persistently high inflation, means that cost of living pressures are likely to build over the autumn.”
SACRAMENTO — In howling winds and choking smoke during the January fires that devastated Altadena and Pacific Palisades, more than 1,100 incarcerated firefighters cleared brush and dug fire lines, some for wages of less than $30 per day.
Those firefighters could soon see a major raise. On Thursday, California lawmakers unanimously approved a plan to pay incarcerated firefighters the federal minimum wage of $7.25 per hour while assigned to an active fire, a raise of more than 700%.
“Nobody who puts their life on the line for other people should earn any less than the federal minimum wage,” said the bill’s author, Assemblymember Isaac Bryan (D-Los Angeles), before the Thursday vote.
Bryan’s legislation, Assembly Bill 247, would take effect immediately if signed by Gov. Gavin Newsom. Newsom’s office said he typically does not comment on pending legislation. But in July, he signed a budget that set aside $10 million for incarcerated firefighter wages.
Working at one of the state’s 35 minimum-security fire camps is a voluntary and coveted job, giving inmates a chance to spend time outside prison walls, help their communities and get paroled more quickly.
Incarcerated firefighters don’t wield hoses, but clear brush and dig containment lines while working on front-line hand crews and do work such as cooking and laundry to keep fire camps running.
Prison fire crews at times make up more than 1 in 4 of the firefighters battling California’s wildfires, and have drawn international praise during major wildfire seasons. After the January fires in Los Angeles, celebrity Kim Kardashian called them “heroes” who deserved a raise.
The state’s 2,000 or so incarcerated firefighters earn $5.80 to $10.24 per day at fire camps, and an extra $1 an hour during active wildfires, according to the California Department of Corrections and Rehabilitation. That means the lowest-paid firefighters earn $29.80 per 24-hour shift and the highest-paid, $34.24.
Higher wages are not only a key way to recognize the life-risking contributions made by incarcerated firefighters, backers said, but could also help inmates build up some savings before they are paroled, or more quickly pay restitution to their victims.
Republican lawmakers who backed the plan emphasized the life-changing nature of finding work with meaning.
“When we talk about anti-recidivism, when we talk about programs that work, this is one of the absolute best,” said Assemblymember Heath Flora (R-Ripon).
Flora said he worked alongside incarcerated and formerly incarcerated firefighters during 15 years as a volunteer firefighter, and said they were “some of the hardest working individuals I’ve ever had the pleasure of working with.”
Bryan originally had proposed a $19 hourly wage, similar to the wage earned by entry-level firefighters with the California Department of Forestry and Fire Protection. During the summer’s budget negotiations, that wage was trimmed to $7.25.
A lobbyist for the California State Sheriffs’ Assn., which opposed the bill, told lawmakers in July that incarcerated firefighters already are “receiving compensation in different ways.” Prison workers assigned to hand crews have their sentences reduced by two days for each day they serve on an active fire.
State Sen. Kelly Seyarto (R-Murrieta), who co-sponsored the bill, cautioned in July that paying higher wages could lead to hiring fewer incarcerated firefighters overall.
The cost to the state will depend on the number of inmate crews staffed and the severity of the fire season.
From 2020 to 2024, inmate firefighters spent 1,382,117 hours fighting fires for $1 per hour, according to a bill analysis by legislative staff. The state would have paid about $10 million in wages — or about $8.6 million more — had the federal minimum wage been in place over those five fire seasons, analysts said.
Years with more fire activity would be more expensive for the state. In 2020, the largest wildfire season in modern history, the state spent about $2.1 million on inmate firefighter wages at $1 per hour, which would have cost $15 million under the new bill language.
The bill follows years of effort to help improve the working conditions of inmate firefighters.
The number fell off sharply after the California policy known as realignment in 2011, which shifted many people who were convicted of nonserious, nonviolent and nonsexual offenses from California state prisons to county jails.
California bars people with a felony conviction from receiving an emergency medical technician, or EMT, certification for a decade after their release from prison. There is a lifetime ban for those convicted of two or more felonies.
In 2020, Newsom signed a bill allowing formerly incarcerated firefighters who were convicted of nonviolent, nonsexual offenses to appeal a court to expunge their criminal records and waive their parole time.
The Legislature this week also passed AB 218, by Assemblymembers Josh Lowenthal (D-Long Beach) and Sade Elhawary (D-Los Angeles), which would require prison officials to draft rules by 2027 to recommend incarcerated firefighters for resentencing.
A number of other bills dealing with fire issues are still pending in the Legislature in its final week of the year. Those include:
AB 226, which would allow the California FAIR Plan, the state’s home insurer of last resort, to increase its capacity to pay out claims by issuing bonds or seeking a line of credit.
AB 1032, which would require healthcare insurers to cover 12 visits a year with a licensed behavioral health provider, including mental health and substance abuse counselors, to residents affected by wildfires.
June 10 (UPI) — The federal minimum wage would rise to $15 per hour, with annual cost-of-living increases based on inflation, in a proposed bipartisan measure.
Sens. Josh Hawley, R-Mo., and Peter Welch, D-Vt., co-sponsored the bill that they have named the “Higher Wages for American Workers Act” and would increase the federal minimum wage from its current $7.25 per hour for non-exempt workers.
“For decades, working Americans have seen their wages flatline,” Hawley said on Tuesday in a joint press release with Welch.
“One major culprit of this is the failure of the federal minimum wage to keep up with the economic reality facing hardworking Americans every day,” Hawley added.
Welch said inflation and rising costs are making it too hard for families to afford basic necessities.
“We’re in the midst of a severe affordability crisis, with families in red and blue states alike struggling to afford necessities like housing and groceries,” Welch said.
“A stagnant federal minimum wage only adds fuel to the fire,” he continued. “Every hardworking American deserves a living wage that helps put a roof over their head and food on the table — $7.25 an hour doesn’t even come close.”
“Times have changed, and working families deserve a wage that reflects today’s financial reality,” Welch added.
Hawley said the current federal minimum wage is less than what a worker earned in 1940 when adjusted for inflation.
If the proposed federal minimum wage increase is passed into law, it would take effect on Jan. 1 and allow cost-of-living increases that match inflation in subsequent years.
Many states have respective minimum wage laws that exceed the current and proposed federal minimum wage, but a dozen still were at the federal minimum wage in 2024.
Many large employers also have higher minimum wages, including Walmart, which has paid its workers at least $14 an hour and often more since 2023.
President Joe Biden in 2021 ordered the federal government to pay contract workers at least $15 an hour.
California lawmakers in 2022 raised the state’s minimum wage for many fast-food workers to up to $22 an hour.
A coalition of airlines, hotels and concession companies at Los Angeles International Airport filed paperwork Thursday to force a citywide vote on a new ordinance hiking the minimum wage of hotel and airport workers to $30 per hour by 2028.
The group, known as the L.A. Alliance for Tourism, Jobs and Progress, is hoping to persuade voters to repeal the ordinance. But first, the alliance would need to gather about 93,000 signatures within 30 days to qualify the measure for the ballot in an upcoming election.
Phil Singer, a spokesperson for the alliance, said the wage increase “threatens revenue Los Angeles urgently needs” — and its standing as the host of the 2028 Olympic and Paralympic Games.
“Small businesses will be forced to shut down, workers will lose their jobs, and the economic fallout will stretch across the city,” Singer said in an email. “We’re fighting for all of it: the city’s future, the jobs that sustain our communities, and the millions of guests the tourism industry proudly serves year after year.”
The new ballot measure campaign comes just two days after Mayor Karen Bass signed the minimum wage legislation into law.
The wage ordinance has been hotly opposed by an array of L.A. business organizations, which argue that it increases wages in the tourism industry too much and too quickly. However, it was welcomed by unions representing hotel and airport employees, which have supported many of the politicians who backed the measure.
The alliance’s campaign committee has received major funding from Delta Airlines, United Airlines and the American Hotel & Lodging Assn., Singer said. The group’s petition, submitted to the city clerk’s office, was signed by five businesspeople, including Greg Plummer, operator of an LAX concession company; Mark Beccaria, a partner with the Hotel Angeleno on L.A.’s Westside; and Alec Mesropian, advocacy manager with the organization known as BizFed.
The alliance is targeting a law that’s slated to push the hourly minimum wage to $22.50 on July 1 for housekeepers, parking attendants and hotel restaurant workers, as well as LAX skycaps, baggage handlers and concession employees. The wage would jump to $25 in 2026 and $27.50 in 2027.
The wage increase was spearheaded by Unite Here Local 11, the hotel and restaurant worker union, and by Service Employees International Union United Service Workers West, which represents private-sector airport workers.
Kurt Petersen, co-president of Unite Here Local 11, called the business group’s proposal “shameful” and promised his union’s members would go “toe to toe out on the streets” with the alliance’s signature gatherers.
“The hotel industry’s greed is limitless,” Petersen said. “They would rather spend millions getting them to sign this petition than pay their workers enough to live in Los Angeles. It’s shameful, but we’re confident that Angelenos will see through their deceptions and stand with workers.”
Under the city’s laws, hotel and airport workers have minimum wages that are higher than those who are employed by other industries.
For nearly everyone else in L.A., the hourly minimum wage is $17.28, 78 cents higher than the state’s. The federal minimum wage is $7.25 per hour.
Backers of the airport and hotel minimum wage hikes say they will help some of the region’s lowest paid workers cover the rising cost of rent and food, while also giving them more disposable income to spend locally, delivering a boost to the region’s economy.
Detractors say it will undermine efforts by L.A.’s tourism industry to recover from the decline in business that was sparked by the outbreak of COVID-19 five years ago. They contend the ordinance will lead to layoffs, while also chilling development of new hotels.
The ordinance also requires airport and hotel businesses to provide an hourly healthcare payment — on top of the minimum wage — that starts at $7.65 in July and is expected to go up each year. (Hotels will be exempted from that requirement until 2026.)
Once the healthcare requirement is included, some businesses will be required to pay their workers an additional 60% over a three-year period, opponents of the wage increase say.
The strike leaves hundreds of thousands of commuters in New Jersey and New York without rail access.
New Jersey’s commuter rail engineers are on strike after negotiations for higher wages failed to materialise, leaving trains idle for commuters in the third-largest transit system in the United States for the first time in more than 40 years.
The strike began on Friday after The Brotherhood of Locomotive Engineers and Trainmen, which represents 450 NJ Transit engineers who drive the agency’s commuter trains and agency management, broke off talks late Thursday after an unsuccessful 15-hour bargaining session.
The labour clash came weeks after negotiators had agreed on a potential deal in March, but the union’s members voted overwhelmingly to reject it.
NJ Transit has said it cannot afford the pay rises that the engineers are seeking because 14 other unions that negotiate separate labour contracts with the agency would demand the same, higher wage rates for their members.
The union pushed back on the gripe and has said that “NJT claims it doesn’t have the money to pay engineers a salary in line with industry standards, but somehow found a half-billion dollars for a new and unnecessary headquarters.”
New Jersey Transit opened a new headquarters earlier this year.
The union has said it is simply aiming to raise the engineers’ salaries to match those at other commuter railroads in the region.
“They [rail engineers] have gone without a raise for six years and have been seeking a new contract since October 2019,” the union said in a statement.
NJ Transit says the engineers currently make $135,000 on average and that management had offered a deal that would yield an average salary of $172,000. But the union has disputed those figures, saying the current average salary is actually $113,000.
The parties have exchanged accusations of bad-faith bargaining.
The strike means that hundreds of thousands of daily passengers in New Jersey and New York are without service. NJ Transit said its rail system began its shutdown at 12:01am local time Friday.
In a news conference, New Jersey Governor Phil Murphy and NJ Transit’s Chief Executive Officer Kris Kolluri told reporters talks had paused but that management remained willing to resume negotiations at any time.
“We must reach a final deal that is both fair to employees and affordable,” Murphy, a Democrat, told reporters. “Let’s get back to the table and seal a deal.”
Murphy and Kolluri said the US National Mediation Board had reached out to both sides to propose reopening talks on Sunday morning, or sooner if the parties wished.
The union statement made no mention of when talks might be restarted. Protests began at several locations across the rail system, including NJ Transit’s headquarters in Newark, Penn Station in New York City, and the Atlantic City rail terminal.
The governor and the NJ Transit CEO also outlined contingency plans for dealing with the work stoppage, the first transit strike to hit New Jersey since a three-week walkout in 1983.
Workers urged to stay home
The looming strike had already prompted the agency to cancel trains and buses to MetLife Stadium for pop star Shakira’s concert last night and again for this evening.
In an advisory, NJ Transit encouraged commuters to work from home starting on Friday if possible.
The agency said it would increase bus services on existing lines and charter private buses to operate from several satellite lots in the event of a rail strike but warned buses would only be able to handle about 20 percent of rail customers.
Kolluri said last week that the union was “playing a game of chicken with the lives of 350,000 riders”.
“We have sought nothing more than equal pay for equal work, only to be continually rebuffed by New Jersey Transit,” Tom Haas, the union’s general chairman, said earlier this week.
The Los Angeles City Council voted Wednesday to approve a sweeping package of minimum wage increases for workers in the tourism industry, despite objections from business leaders who warned that the region is already facing a slowdown in international travel.
The proposal, billed by labor leaders as the highest minimum wage in the country, would require hotels with more than 60 rooms, as well as companies doing business at Los Angeles International Airport, to pay their workers $30 per hour by 2028.
That translates to a 48% hike in the minimum wage for hotel employees over three years. Airport workers would see a 56% increase.
On top of that, hotels and airport businesses would be required to provide $8.35 per hour for their workers’ health care by July 2026.
The package of increases was approved on a 12-3 vote, with Councilmembers John Lee, Traci Park and Monica Rodriguez opposed. Because the tally was not unanimous, a second vote will be required next week.
Rodriguez, who represents the northeast San Fernando Valley, told her colleagues that the proposal would cause hotels and airport businesses to cut back on staffing, resulting in job losses. The same thing is happening at City Hall, with elected officials considering staff cuts to cover the cost of employee raises, she said.
“We are right now facing 1,600 imminent layoffs because the revenue is just not matching our expenditures,” Rodriguez said. “The same will happen in the private sector.”
Councilmember Hugo Soto-Martínez, standing before a crowded of unionized workers after the vote, celebrated their victory.
“It’s been way too long, but finally, today, this building is working for the people, not the corporations,” said Soto-Martínez, a former organizer with the hotel and restaurant union Unite Here Local 11.
Hotel owners, business groups and airport concession companies predicted the wage increases will deal a fresh blow to an industry that never fully recovered from the COVID pandemic. They pointed to the recent drop-off in tourism from Canada and elsewhere that followed President Trump’s trade war and tightening of the U.S. border.
Adam Burke, president and chief executive of the Los Angeles Tourism and Convention Board, said Canada, France, Germany, Ireland, the Netherlands and the United Kingdom — nations that send a large number of visitors to Los Angeles — have issued formal advisories about visiting the U.S.
“The 2025 outlook is not encouraging,” Burke said.
Several hotel owners have warned that the higher wage will spur them to scale back their restaurant operations. A few flatly stated that hotel companies would steer clear of future investments in the city, which has long served as a global tourism destination.
Jackie Filla, president and chief executive of the Hotel Association of Los Angeles, said she believes that hotels will close restaurants or other small businesses on their premises — and in some cases, shut down entirely.
In the short term, she said, some will tear up their “room block” agreements, which set aside rooms for the 2028 Olympic and Paralympic Games.
“I don’t think anybody wants to do this,” Filla said. “Hotels are excited to host guests. They’re excited to be participating in the Olympics. But they can’t go into it losing money.”
Jessica Durrum, a policy director with the Los Angeles Alliance for a New Economy, a pro-union advocacy group, said business leaders also issued dire warnings about the economy when previous wage increases were approved — only to be proven wrong. Durrum, who is in charge of her group’s Tourism Workers Rising campaign, told the council that a higher wage would only benefit the region.
“People with more money in their pockets — they spend it,” she said.
Wednesday’s vote delivered a huge victory to Unite Here Local 11, a potent political force at City Hall. The union is known for knocking on doors for favored candidates, spending six figures in some cases to get them elected.
Unite Here Local 11 had billed the proposal as an “Olympic wage,” one that would ensure that its members have enough money to keep up with inflation. The union, working with airport workers represented by Service Employees International Union-United Service Workers West, also said that corporations should not be the only ones to benefit from the Olympic Games in 2028.
Workers from both of those unions testified about their struggles to pay for rising household costs, including rent, food and fuel. Some pleaded for better health care, while others spoke about having to work multiple jobs to support their families.
“We need these wages. Please do what’s right,” said Jovan Houston, a customer service agent at LAX. “Do this for workers. Do this for single families. Do this for parents like myself.”
Sonia Ceron, 38, a dishwasher at airline catering company Flying Food Group, said she has a second job cleaning houses in Beverly Hills for about 32 hours a week. Ceron lives in a small studio apartment in Inglewood, which has been difficult for her 12-year-old daughter.
“My daughter, like every kid, wants to have her own room, to be able to call her friends and have her privacy. Right now, that’s impossible,” Ceron said.
L.A.’s political leaders have enacted a number of wage laws over the last few decades. The hotel minimum wage, approved by the council in 2014, currently stands at $20.32 per hour. The minimum wage for private-sector employees at LAX is $25.23 per hour, once the required $5.95 hourly healthcare payment is included.
For nearly everyone else in L.A., the hourly minimum wage is $17.28, 78 cents higher than the state’s.
Perched high above the Cahuenga Pass, the 24-story Hilton Los Angeles Universal City Hotel is positioned to be a prime gathering spot for visitors arriving for the 2028 Summer Olympic and Paralympic Games.
Sun Hill Properties Inc., which manages the 495-room hotel, has already signed a “room block” agreement with the LA28 organizing committee, reserving hundreds of rooms for Olympics fans. The City Council recently approved a plan to let the Hilton add a second, 18-story tower, which would open just in time for the Olympics.
Now, the future of the $250-million expansion is in doubt. On Wednesday, the Los Angeles City Council is set to vote on a requirement that hotels with 60 or more rooms pay their workers at least $30 per hour by 2028, along with a new $8.35 per hour healthcare payment.
If the council approves the proposal without significant changes, Sun Hill “absolutely will be pulling out of the room block for the Olympics,” said Mark Davis, the company’s president and chief executive. The hotel’s investors will also kill the 395-room expansion, he said.
“Our board was very adamant that if [council members] go forward with this nonsense, that it’s dead,” Davis said. “They’re going to move the project somewhere else.”
The council voted 12-3 last year to instruct City Atty. Hydee Feldstein Soto to draft the package of minimum wage hikes, which would apply not just to hotels but also private companies at Los Angeles International Airport, such as airlines and concessions. The minimum wage would be the highest in the country, according to Unite Here Local 11, the hotel and restaurant workers union, which has championed the proposal.
Mark Davis, president and CEO of Sun Hill Properties, said a proposal to hike L.A.’s minimum wage for hotel workers would kill a plan for a new 18-story hotel tower unless it is reworked.
(Marcus Ubungen / Los Angeles Times)
Backers of the higher wage say L.A.’s tourism workers are struggling to pay for food and rent, and deserve to benefit financially from the Olympics just as much as private corporations. They dismiss the hospitality industry’s dire warnings, including the notion that increased wages will scuttle the development of new hotels.
City Councilmember Hugo Soto-Martínez said the Sheraton Universal Hotel, a nearby competitor of the Hilton, has already been paying a higher wage to its unionized workforce. The real threat to the development of new hotels, he said, is higher interest rates and the economic uncertainty surrounding President Trump’s trade policies.
“So, I just don’t buy it,” said Soto-Martínez, a former hotel union organizer, as he referred to Davis’ warning.
Under the city’s proposal, the hotel and airport minimum wage would reach $22.50 on July 1. It would jump to $25 in July 2026, $27.50 in July 2027 and $30 in July 2028. On top of those increases, the $8.35 per hour healthcare payment would go into effect on Jan. 1.
Business groups point out that two hotels have closed in the past year — Four Points by Sheraton next to LAX and Mama Shelter in Hollywood, for a loss of 270 jobs. They say Trump’s trade wars are driving down tourist activity from other nations, with visitors from Canada especially lagging.
Once the increases are in effect, business leaders say, hotels with on-site dining won’t be able to compete with non-hotel restaurants, which will have a much lower minimum wage.
Jon Bortz, chairman and chief executive of the Pebblebrook Hotel Trust, said his company is already looking at scaling back restaurant operations at two of its Southern California properties — the Kimpton Hotel Palomar and the W Los Angeles West Beverly Hills, both in Westwood near UCLA.
The Palomar will likely offset the cost of the higher minimum wage by converting its restaurant into a self-service breakfast operation, while the W will probably close at least one of its two restaurants, Bortz said. “We have to change the business model of these properties to have any hope of surviving,” he added.
Bortz said the proposed wage hikes, along with other hotel regulations approved by the City Council in recent years, have spurred Pebblebrook to look to other markets for new hotel projects.
“Frankly, the [L.A.] market, from a broad-based buyer perspective, has been crossed off the map by investors,” he said.
Hotels in other parts of L.A. are considering similar reductions. An executive with Lightstone Group, which owns the 727-room Moxy + AC Hotels near the Convention Center, told City Council members last year that the minimum wage proposal would likely result in the closure of Level 8, a collection of restaurants on the hotel’s eighth floor.
Mark Beccaria, a partner with the Hotel Angeleno near the 405 Freeway, said in a separate letter to city leaders that he would have to shutter not just the hotel’s restaurant but also its valet parking, eliminating 39 jobs.
“Common sense says you cannot raise wages over 50% in a year when revenues are down,” he said.
Kurt Petersen, co-president of Unite Here Local 11, accused the hotels of fear-mongering, saying they are misrepresenting the potential impact of the planned wage hikes. Hotel owners, he said, “act like the sky is falling every time they have to share profits with their workers.”
“This ‘Chicken Little’ stuff has got to end. Every single time, hotels cry poverty, and then a day later, they’re doing fine. It’s always the same routine,” Petersen said. “What’s not falling is rent and healthcare. What’s not sustainable is workers not earning enough to live in Los Angeles.”
The hospitality industry issued similar warnings a decade ago — when the council approved the current hotel minimum wage — only to see tourism flourish in the years that immediately followed, said Víctor Sánchez, executive director of the L.A. Alliance for a New Economy, a pro-labor advocacy group that produced a report on that phenomenon.
In Long Beach, where residents voted to raise the hotel minimum wage last year, revenue per available room was up 15.7% in March compared with the same month the prior year, said Sánchez, citing data from the real estate group CoStar.
L.A.’s political leaders have enacted a number of wage laws over the last few decades. The hotel minimum wage, approved by the council in 2014, is currently $20.32 per hour. The minimum wage for private-sector employees at LAX is $25.23 per hour, once the required $5.95 hourly healthcare payment is included. Then there’s the minimum wage for nearly everyone else in L.A., which is $17.28 per hour — 78 cents higher than the state’s.
The hourly minimum wage for hotel and airport workers was already slated to go up this year, as part of regularly scheduled increases in the city’s wage laws. Once the council showed interest in the much larger increases, business leaders began warning that hotel developers would take their business elsewhere.
Few were as dramatic as Davis, who told council members that their proposal, as drafted, would “likely kill” the Universal City Hilton’s 395-room expansion.
Davis, whose company has hotels in Simi Valley, Colorado Springs, Colo., and the greater Denver area, said his board instructed him last year to look at acquiring property outside of California, in markets that “make more sense financially for an investment of $250 million.”
“The owners investing this money, they have to look at the numbers,” he said in an interview. “Any project survives only by its numbers.”
The Universal City Hilton already pays most of its workers more than $25 per hour, while also offering healthcare coverage, Davis said. If those health plans have a financial value lower than the $8.35 per hour, the company will need to make up the difference, he said.
Davis said he, too, is looking at scaling back restaurant operations, which would likely require layoffs.
At one point, Davis’ project drew support from the city’s political leaders.
The Universal City Hilton reached an agreement early on with construction trade unions, promising to pay a higher prevailing wage to the estimated 1,000 construction workers who would work on the new tower.
In August, the council voted unanimously to seek an economic analysis that would determine whether the city should provide taxpayer assistance to the project. The analysis, requested by Councilmembers Nithya Raman and Soto-Martínez, would have explored whether to allow the hotel to keep a share of the tax revenues generated by the new tower.
Raman, whose district includes a portion of Universal City, did not respond to questions from The Times about the project — or the potential impact of the higher tourism wage.
In recent days, the Hotel Assn. of Los Angeles has been appealing directly to Mayor Karen Bass, purchasing digital ads that ask her to intervene on the minimum wage issue.
Bass, in an interview earlier this year, said she wants hotel workers to “make a decent living” while also ensuring that their employers “are able to survive.”
“We have to make sure that we can address both — that we can address the needs of the workers without crippling the industry,” she said.
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