Push to Raise Minimum Wage Goes Local, at Airports and Hotels
By Nelson D. Schwartz
Labor unions and community groups are pursuing an increasingly successful strategy to force employers to pay their workers more: minimum wages for specific occupations and industries.
The effort has resulted in several noteworthy victories recently — mandatory pay of up to $20 an hour for hotel workers in Oakland, and raises for airport employees in Denver and Houston. Organizers behind these efforts say they want to shift the debate from establishing a bare-minimum wage for workers at the lowest rung of the economic ladder to lifting more people into the middle class.
“Our goal was to keep up with rising housing costs and help people stay in their homes and communities,” said Jahmese Myres, acting executive director of the East Bay Alliance for a Sustainable Economy, a major force behind the Oakland effort. “While we’re hoping it gets addressed comprehensively at the federal and state level, workers in Oakland can’t afford to wait,” she added.
By keeping the focus on specific industries and occupations, organizers have largely been able to bypass the partisan divide over the national minimum wage, which has been frozen at $7.25 for a decade. The House has passed legislation that would raise the minimum wage to $15 an hour, but the bill has no chance in the Republican-controlled Senate.
The push for sector-specific minimum wages comes amid a broader debate about inequality, and a sense that the fruits of the decade-long recovery have largely gone to highly educated Americans while most workers have had to make do with modest gains. It also seeks to build on the momentum from successful efforts for state and local minimum-wage increases in places like Seattle, New York State and California.
“Workers are standing up to a broken system,” said David Madland, a senior fellow at the liberal Center for American Progress. “It’s largely in progressive cities and states right now, but there’s a renewed sense of grass roots activism.”
But it is workers in particular businesses that have seen the biggest gains. Under pressure from unions like the Service Employees International Union and UNITE HERE, local governments have raised salaries for airport employees and hotel workers across the country.
Part of the unions’ calculus is that the costs of such targeted higher minimum wages, especially in the travel and hospitality industries, will primarily be borne by visitors and affluent local residents, rather than those with lower incomes. That has made the increases more palatable to voters and elected officials.
“We know our industry,” said D. Taylor, international president of UNITE HERE, which represents hotel workers. “We don’t pretend to know every industry like retail or construction.”
But employers and some economists argue that raising the minimum wage, even if only for some workers, will raise the cost of doing business and could ultimately backfire by discouraging hiring.
“You’re creating incentives for hotels and airports to find ways to get by with fewer workers,” said Michael R. Strain, director of economic policy studies at the American Enterprise Institute. “The losers are the least experienced, least skilled people in the labor market.”
Still, Mr. Strain said local efforts made more economic sense than increasing the federal minimum wage of $7.25 an hour. Employers in big cities in California can more easily pay workers $15 an hour than those in, say, small-town Ohio.
In March, the Denver City Council lifted wages for more than 6,000 airport workers, including ramp agents, baggage handlers and retail employees, to $15 an hour by 2021, with intermediate increases to $13 in 2019 and $14 in 2020. That followed successful campaigns for higher pay at airports in New York, Chicago and Los Angeles.
“People may feel it’s only $3 an hour, but it makes a big difference in my life,” said Ahmed Osman, a wheelchair assistant at Denver International Airport. Before the increase, he was earning $10.20 an hour.
“I was a doctor back in Sudan, and it is challenging to work in a minimum-wage situation,” he said. “This has freed up time for me to study for my medical licensing exams.”
Earlier this month, the mayor of Houston, Sylvester Turner, instituted a $12-an-hour minimum for airport workers that will go into effect in 2021. Currently, some airport workers make less than $9 an hour, not much more than national minimum wage.
“I have to try to make ends meet,” said Quintina Moore-Caraway, 45, a ramp agent at George Bush Intercontinental Airport in Houston. “Everything in my house I’ve had to pawn. It’s hard to find a second job when you have a family.”
Hotel workers in Oakland saw a bigger bump when Measure Z, a ballot proposal approved last November by a margin of three to one, went into effect over the summer. It requires hotels to pay at least $15 an hour — and $20 an hour if they do not provide health insurance. The minimum wage for other workers in Oakland is $13.80.
The minimum wage in California is $12 an hour and will increase by $1 annually until it reaches $15 in 2022. Many cities will hit that benchmark before then; San Francisco is already at $15.59.
Besides the pay increase, Measure Z limits the total area that hotel workers have to clean daily and requires employers to equip them with panic buttons to use if they are in danger.
UNITE HERE led the campaign for the measure along with the East Bay Alliance for a Sustainable Economy.
The travel industry is doing well, advocates assert, and employers can afford raises.
“Hospitality has pretty comfortable margins, compared with, say, restaurants or retail,” said Wei-Ling Huber, president of UNITE HERE’s Local 2850 in Oakland.
About 20 hotels will be affected by the law, according to Dhruv Patel, president of Ridgemont Hospitality, which operates two of them. Measure Z applies to establishments with more than 50 rooms.
Before Measure Z, Mr. Patel paid $14.50 an hour with optional health insurance. Now many workers are asking for $20 and forgoing health coverage.
“Going from $14.50 to $20, that has a huge economic impact,” Mr. Patel said. “To single out an industry shouldn’t be legal.”
Ridgemont has 45 employees, he said, but would have added 10 to its support staff were it not for the new minimum wage. “Something has to give to make up for the higher salaries,” Mr. Patel said.
Oakland is going through a renaissance, Mr. Patel said, but now hotel developers might choose to build elsewhere in the East Bay.
Libby Schaaf, Oakland’s mayor, said she supported Measure Z as a necessary step to raise wages for working-class employees. But she said she worried that businesses would be confused by wage rules that vary by city and industry.
“This will result in a patchwork of local activism, but we have to do it because the federal government has not,” Ms. Schaaf said. “I’m very frustrated by the failure of federal policymakers to set a livable minimum wage.”
The Fight for $15 movement has sought to raise the national minimum wage to $15 and has received strong support from Democrats, including the party’s presidential candidates. In July, the House, which has a Democratic majority, passed legislation that would raise the minimum wage to $15 an hour by 2025, but the Senate has not taken up the measure.
Opponents of raising the minimum wage have long warned that doing so would cost jobs, but the low unemployment rate has undercut those arguments. Research following minimum-wage increases in Seattle offered conflicting results about the benefits for most workers.
Denver, Houston and other cities that have raised minimum wages tend to have strong local economies, which makes it less likely that they will suffer net job losses. While not as prosperous as some of those cities, Oakland is gaining residents and jobs as a result of the boom in neighboring San Francisco and Silicon Valley.
Airlines for America, an industry association, has opposed airport-specific wage increases across the country, including the move in Denver. The group has argued that the increases will be passed on to travelers through higher airfares.
“We continue to believe that the appropriate way to address wage issues is to ensure that all workers are covered equally across the board,” the group said in a statement. “Picking winners and losers and creating a patchwork of conflicting and confusing local standards is just bad policy.”
But labor activists and some economists say industry-specific minimum wages serve an important purpose — increasing the incomes of workers who are not clustered at the bottom of the pay scale.
“This is for middle-income workers,” said Ben Zipperer, an economist with the liberal Economic Policy Institute. “Having sectoral standards can have a much broader effect than just raising the minimum wage.”
Places like Oakland may stand out, but more cities could adopt this approach, said Ken Jacobs, chair of the Labor Center at the University of California, Berkeley. A recession might delay the process, but even then he expects it to continue.
“I expect we will see more of this kind of experimentation in the coming years,” Mr. Jacobs said. “How do you create more middle-class jobs and go above $15 an hour? That’s where you have sectoral and local strategies.”