L.A. City Council approves pay raise to cover LAX workers' health costs

Contractors must either pay $14.80 an hour or $10.30 an hour with a $4.50 contribution to cover workers' insurance coverage.

September 10, 2009

By Dan Weikel

Although the economic climate is the worst in decades, the Los Angeles City Council on Wednesday unanimously approved a measure designed to provide health insurance to about 5,100 low-income workers at Los Angeles International Airport by requiring employers to increase their pay.

In a move supported by a coalition of clergy, educators and labor organizations, council members invoked the city's "living-wage" ordinance to raise the hourly wage for employees of airport service companies from $11.55 to $14.80.

Under the change, employers of airport service workers must either pay $14.80 an hour or $10.30 an hour with a $4.50 contribution for a health insurance plan for the employee or about $8,500 a year that can be applied to coverage.

The measure also prohibits employees from opting out of coverage offered by their employer that does not require an out-of-pocket contribution by the employer. Employers, however, can decide to pay the full hourly wage to an employee instead of the lower wage and health insurance.

"We've been fighting almost two years for this. Before, we had nothing," said Claudia De Leon, 29, an airport security worker who told council members that her 3-year-old son had been denied treatment at an emergency room for a serious dog bite because she did not have insurance.

The council approved the wage increase despite the concerns of business organizations and the airlines, who allege the measure will increase the cost of doing business in Los Angeles amid the worst economic downturn since World War II. The airlines, which have been laying off thousands of workers, lost $8 billion in 2008 and are expected to lose $9 billion this year.

The wage increase affects thousands of people who work for private contractors that perform a variety of services for airlines and aviation-related companies at LAX, the nation's third busiest airport. Those firms provide janitors, skycaps, baggage handlers, aircraft cabin cleaners, security personnel and attendants for travelers with disabilities.

Airport service employees represent about 60% of the workers covered by the city's 1997 living-wage ordinance. Though the law also applies to businesses with city contracts, the wage increase does not apply to them. Council members said that other increases may be extended to them in the future.

Under the old wage, employers had to pay $11.55 an hour or $10.30 an hour with a $1.25 contribution to a health insurance plan. However, the $1.25 an hour differential was not increased for more than a decade, though the cost of healthcare soared, making adequate health insurance unaffordable for workers and employers.

"These people keep our airport working," said Councilwoman Janice Hahn, who pushed for the increase. "If you think businesses are suffering, the airlines are suffering and corporations are suffering, then take a look at these people."

Studies indicate that about 2,400 LAX workers and 700 of their children lack health coverage. The wages of another 2,000 workers are so low that they qualify for state-funded medical care, researchers say.

The low pay and lack of health insurance has contributed to absenteeism and high turnover.