Minimum Wage

Some L.A. Unionized Hotel Workers Realize They've Been Screwed Over

Exemptions to minimum wage laws give labor power at the expense of their own members.


Hotel room
Credit: Erwin Purnomo Sidi |

California's upcoming, poorly thought out (beyond the political gains) massive minimum wage boost to $15 per hour does not grant unions an exemption. They will not be permitted to "collectively bargain" away the price floor in exchange for other benefits, just like businesses who are not unionized.

While most folks may assume that this has always been the case, in reality, cities and municipalities that have set their own minimum wages and other employment mandates have included exemptions for unions. Many people aren't aware of it, and it may seem odd on the surface, given that the unions themselves are pushing for the increases.

This is what happened in Los Angeles when the city mandated a special minimum wage of $15.37 that applied only to hotel workers. It included an exemption for workers represented by unions, which essentially meant this minimum wage was really a fine for not being unionized. Over the weekend, the Los Angeles Times took note that there are union workers that feel betrayed by these agreements and realize exactly what they're for—to help unions expand their power and membership, not to actually help workers:

Alicia Yale, 42, a waitress at the Sheraton Universal, said she's dumbfounded that Unite Here Local 11, which represents hotel employees in Los Angeles and Orange counties, fought for her to make less money than workers at non-union hotels.

"Why is it more of a benefit to be in a union? The union isn't really doing anything for us," she said. "It's completely upside-down. They want to pay us less than the minimum wage."

Yale, a mother of two young children, said she was unconvinced by labor leaders' arguments that the exemptions were designed to secure better benefits. She said many low-wage workers at the Sheraton lack health insurance because the union's contract requires them to work at least 100 hours a month for five consecutive months to qualify.

Another hotel worker said she was bluntly told exactly why the exemptions existed:

Penny Moore, a bartender and former union shop steward at the Sheraton Universal, said she was perplexed in the weeks after the 2014 law passed when a Sheraton human-resources official told her that many employees would not be getting the promised pay raise. After phoning the union office, she said, she received a call from Unite Here Local 11 organizer Fred Pascual.

"He said I've got to look at the bigger picture," Moore said, that "this is going to make all the hotels go union." She said Pascual did not elaborate on his remark, but she interpreted it to mean hotels would embrace collective bargaining agreements in order to pay less.

"There is no other purpose for it," said Moore, who already makes more than $16 an hour and did not stand to benefit from the increase. "It doesn't make me happy to have to attack them like this. But the alternative is my co-workers" lose out. "And that's not OK."

I wouldn't expect Unite Here to care much about Moore's criticism. The Times notes that the union has seen a 73 percent increase in membership since they've embarked on this effort to control hotel wages in a time when private unions are seeing drops.

Of course, now that California has a new minimum wage mandate, this exemption will be phased out. The state minimum wage law does not forbid union-negotiated undercutting.

Sadly, while the story looks at the difference in pay for union hotels vs. non-union hotels, it does not consider what it all means for employment figures. Have those non-union hotels had to cut positions or freeze hiring to pay for these new burdens? It doesn't say. It may well be that the reason those union workers even have jobs is because of the exemption the union negotiated that their non-union opposition could not have.

But apparently the fight over who has to pay Los Angeles' $15 minimum wage (passed and planned to be phased in before the new state shift) will continue in the meantime. As Matt Welch noted before, unions attempted to get the same exemption in a city-wide increase but failed. But they're not giving up. There are "add-on clauses" under consideration this week that could affect who will have to pay.