Along Century Boulevard

Ordinance projected to boost spending, create jobs

December 3, 2009

By Cynthia Griffin, Our Weekly

A new study released Wednesday by the Los Angeles Alliance for a New Economy at City Hall estimates that in its first four years of implementation, a Living Wage Ordinance (LWO) that was put into place for the 12 hotels in the Century Boulevard corridor is expected to result in an additional $7 million in increased wages paid to 889 of the 2,400 workers covered.
According to the report—“Transforming the Gateway to L.A.: The Economic Benefits of a Sustainable Tourism Model”— this means that the average worker who qualified for an increase should receive an additional $1,986 per year, which equates to a 10.3% salary increase.

Called the Airport Hospitality Enhancement Zone or Living Wage Ordinance (LWO), the legislation went into effect July 2008, and required the hotels along the corridor to pay their workers a minimum of $11.13 per hour without health insurance or $9.88 hourly plus $1.25 for health insurance.

In addition to the LWO, four of the hotels signed collective bargaining agreements with the union UNITE Here, and according to the report the 879 workers covered by these are projected to receive an additional $2,154 in wages each year for the first four years of the contracts.

The pacts were signed between 2007 and 2009 with the Sheraton Gateway, the Westin LAX, the Four Points LAX and the Radisson LAX.

The increased wages were also accompanied by the average union worker who puts in more than 25 hours a week receiving an additional $1,078 annually in health and dental benefits over the first four years of the agreement.

Beyond the increased wages and health coverage, the report estimates that there are collateral economic impacts on the communities where these workers live, which are typically the communities adjacent to the airport area.

Transforming the Gateway to L.A. forecasts that $4.7 million of the $7 million in additional wages generated by the LWO will be invested in local community through increased spending at grocery stores, restaurants and at local shops and services. It also noted that more than $5 million of the $7.6 million generated by the union contracts is expected to be invested in the local community.

This total $10 million in additional revenue should create 106 new jobs over four years, noted the report.