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Measure N: Voters Approve $13 Wage

And Benefits For Long Beach Hotel Workers

By Joshua H. Silavent
Staff Writer

November 20th, 2012 – Long Beach voters took to the polls on Election Day and overwhelmingly cast their support for a living wage (or minimum wage, depending on choice of terminology) of $13 per hour for workers in the city’s largest hotels. The earliest the law would likely take effect is December 21.

“In terms of what message voters sent . . . it affirms that the City of Long Beach was ready to really look at how quality of life issues matter, regardless of what level of employment or which sector you work in,” Councilmember Suja Lowenthal told the Business Journal.

As of November 13, more than 73,500 voters agreed compared with nearly 43,200 who said ‘no’ to Measure N. Moreover, the ballot measure passed in all nine city council districts (as of press time, several thousand ballots remained uncounted by the Los Angeles County Registrar of Voters office).

“You say raise the minimum wage and people agree with that,” Leigh Shelton, spokesperson for UNITE HERE Local 11, the union responsible for Measure N’s appearance on this year’s ballot, told the Business Journal. She noted that voters in the cities of San Jose and Albuquerque, New Mexico, also passed minimum wage ordinances November 6 of $10 and $8.50 per hour, respectively. The minimum wage across the Golden State is $8 an hour.

But the Long Beach measure is unique because it does not apply to all workers in the city, but rather only to workers in hotels with 100 rooms or more.

Measure N also imposes a mandatory 2 percent annual increase in pay regardless of job performance or economic climate, guarantees five paid sick days per year and assures that workers receive 100 percent of guest services charges, such as mandatory gratuities attached to room service.

According to publicly available campaign reports, the Yes on N Committee (or Long Beach Committee for a Living Wage) received nearly $615,000 in contributions as of October 25. The No on N Committee (or Coalition for Fair Wages in Long Beach, sponsored by a collective of hotels) received about $504,000 and the Long Beach Jobs PAC spent about $42,000 to oppose both Measure N and Measure O, which sought to change the city’s election schedule but failed.

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However, corporate heads placed a kind of gag order on managers from the city’s big hotels, such as the Hyatt, Hilton and Westin, which might have ultimately doomed the campaign against Measure N.

“My summary of Measure N is that voters just simply did not understand what it was really all about,” Randy Gordon, president and CEO of the Long Beach Area Chamber of Commerce, told the Business Journal. “I have a feeling that a lot of people just felt sorry for the maids, and that they have no idea how bad this is going to be for the tourism industry.” Gordon conceded that the hotels should have done a better job of getting their message out about how they might be negatively impacted.

The tourism industry is unquestionably a moneymaker for the city, particularly because large hotels host conventions, which bring in big bucks. But both sides of the Measure N debate have advanced this point in support of their respective positions.

For example, supporters say impacted hotels will only need to raise their room rates by about $1.50 per night in order to absorb the cost of Measure N.

“I think it’s a flawed argument to suggest the industry would be hurt,” Lowenthal said. Opponents, on the other hand, contend that the increase in room rates will make hotels in the city less competitive when trying to attract conventions.

“Given the poor condition of our current economy, I am concerned about any measure that could negatively impact tax revenues and employment,” Councilmember Gary DeLong told the Business Journal in an e-mail. “My concern is that Measure N could result in fewer opportunities for employees and reduced tax revenue to the City of Long Beach.”

Gordon said that occupancy rates at Long Beach hotels remained below 2007 levels and that Measure N would likely cost impacted hotels millions of dollars annually. “There’s no doubt that could cost us a convention,” he added. Moreover, he thinks layoffs are probable as hotels feel the pinch of paying increased payroll taxes, in addition to higher wages.

“I think it would be a real shame to have companies sort of use the law as an excuse to layoff workers,” Shelton said.

The Best Western Long Beach presents an interesting case study in this debate. It has exactly 100 rooms, and in an article published by the Business Journal prior to Election Day, General Manager Mike Singh said that if Measure N passed, “We are out of business. It is that simple.”

There has been speculation that the Best Western might simply close one of its rooms – perhaps turning it into a storage facility – thereby skirting the law by falling under the 100-room stipulation. (Singh did not return multiple requests for comment prior to publication).

An aspect of Measure N somewhat lost in the debate is the fact that hotel workers might now have a mandate from voters to unionize and, consequently, hotels might have reason to enter into collective bargaining in order to negotiate a lower hourly wage.

There are 15 hotels in Long Beach without collective bargaining agreements that are subject to Measure N, impacting about 2,000 workers. Hotel Maya and the Queen Mary hotel are not included because they are already unionized.

“This whole thing goes away if the hotels simply agree to collective bargaining,” Gordon said. “In my opinion, the maids will never see $13 an hour.”

It is worth noting that if workers at the Hyatt, Hilton, Westin or other impacted hotels choose to unionize, they will incur monthly dues. For example, workers at the Hotel Maya in Downtown Long Beach – represented by UNITE HERE Local 11 – pay $41 per month in union dues, Gordon said hotel sources had told him. Moreover, these same workers also make about $11.96 per hour, a full $1 less than their counterparts might at hotels impacted by Measure N. However, these workers also receive full health insurance coverage.

“If workers end up engaging in collective bargaining, where other employment package items are on the table other than just the wage . . . I champion that,” Lowenthal said, adding that healthcare coverage might warrant agreeing to a lower hourly wage. “I think that would be a great outcome.”

Only time will reveal whether unionization comes to pass. For now, UNITE HERE is staying mum.

“We’re not really in a place to talk about that right now,” Shelton said.