(NewsNation) — Mayor Karen Bass and the Los Angeles City Council recently enacted legislation to raise the minimum wage to $30 an hour for tourism workers by the 2028 Olympic Games.
The law is set to raise the minimum wage for tourism workers from $21 to $30 per hour, but it is being put on hold as some businesses are pushing for a referendum to repeal the legislation.
Business owners in LA have been dealing with a struggling local economy and fear the wage hikes could lead to widespread layoffs and force closures before the games begin.
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Tourism struggles in LA
The wildfires, protests, trade policies and crackdowns on immigration have all contributed to the decline of tourism and the economy in Los Angeles.
According to Visit California, international tourism is projected to be down nearly 10% in the state in 2025. Los Angeles has already seen a 5% decline in international travel to the city this year.
As tourism decreases, some businesses have struggled to stay afloat.
One hotel owner, Jeff Zarrinnam, told The New York Times he has major concerns about how the rising wages will affect small hotels like his.
“I understand when people want better wages,” he said. “But at the same time, I am a hotelier and you have to have stability, and raising the minimum wage every year hurts that stability.”
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Tourism workers argue their wages should increase
Workers in the tourism industry have long fought for increased wages in Los Angeles, where the cost of living is 50% higher than the national average, according to Payscale.
“I fought for the Olympic wage so that I could keep a roof over my head and provide for my family back in Honduras,” said Maria Torres, dishwasher at an airline catering company that prepares meals for international flights out of LAX and member of the UNITE HERE Local 11 union.
Businesses opposing the wage increase are expected to spend millions of dollars on the referendum to block the law from passing, according to a UNITE HERE Local 11 press release.
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Rising wages affect business owners, layoffs
California has experienced increasing wages for several years, which has often placed a burden on business owners and contributed to layoffs.
From 2015 to 2023, California increased the minimum wage by 72%, rising from $9 an hour to $15.50 an hour, according to the California fast food workers union.
As of 2024, fast food workers in California saw their wages increase to $20 an hour, which resulted in a decline of over 23,100 fast food jobs, according to a report from Pepperdine University. The rest of the country saw growth in the same category.
“The employment losses in California’s fast-food industry are now evident, and they confirm what many had warned about: drastic wage hikes create real economic consequences, especially for entry-level workers,” Christopher Thornberg, founding partner at Beacon Economics, said in the report.
