With benefits, the effective wage is $38.35. This is inflationary.
New Minimum Wage AI Overview
Los Angeles is moving towards a $30 minimum wage for hotel and airport workers by 2028, a move supported by unions and some council members who believe it will benefit the local economy. The city council passed an ordinance to implement this wage increase, and the law is expected to take effect in stages, reaching $30 per hour by 2028. This increase will impact hotels with over 60 rooms and businesses at LAX, including airlines and concessionaires.
Los Angeles Throttles Its Tourism Industry
The Wall Street Journal comments Los Angeles Throttles Its Tourism Industry
The 2028 Summer Olympics are three years away, but host city Los Angeles is already on track to miss the podium.
The law requires not only a $30 minimum wage by 2028, but also $8.35 hourly in required benefits spending—for an effective wage of nearly $40 an hour. An Oxford Economics study on the mandate found that 15,000 hospitality and construction jobs would be eliminated, with $342 million in construction spending halted and nearly $170 million in tax revenue lost.
Los Angeles’s Olympic bid was contingent in part on having enough hotel rooms for athletes, spectators and officials. Hotels signed agreements guaranteeing a certain number of rooms at a given rate during the Games.
Those agreements are now at risk: Eight hotels have said they will pull out of the room plan, citing the unworkable economics of the new minimum-wage law. A hotel development that would have created 395 rooms for the Olympics was canceled. More-severe consequences are expected.
Los Angeles relies on the transient occupancy tax revenue it receives each time a hotel room is booked. Fewer visitors mean less city revenue, which comes at a precarious time as Los Angeles has cut constituent services and 600 city jobs to close a $1 billion budget deficit.
Don’t tell that to the hotel union, whose co-president Kurt Petersen has dismissed the evident consequences of the wage mandate as a “Chicken Little” mentality. His own members might feel differently: The union shed almost 10,000 members last year, perhaps in part to earlier wage hikes he championed.
Mr. Petersen is looking to 2028, threatening a potential strike when current contracts expire months before the Olympics. Many hoteliers aren’t waiting around to find out. “Frankly, the market, from a broad-based buyer perspective, has been crossed off the map by investors,” one hotel executive told the Los Angeles Times.
The state has asked Congress for $40 billion to help Los Angeles recover from the fires. Legislators should consider conditioning that aid on a moratorium on any mandates, including the $30 minimum wage, that would put recovery and taxpayer dollars at risk.
Give the Cities Nothing
The last paragraph above is ridiculous. Congress should give cities nothing because all they will do with the money is waste it.
And then once they waste it, they will continue their union and DEI pandering anyway.
Soaring Minimum Wages
Does anyone recall the fight for $15?
It’s now a fight for $30 plus another $8 in benefits.
Rising wages for hotels will increase the pressure for rising wages elsewhere. And if wages rise, so will prices at hotels and restaurants.
So far, this madness is local to LA, but don’t expect it to stay there.
Treasury Yields
Every day I watch yield on long-term treasuries.
The 10-year treasury note yield is 4.47 percent.
The 30-year long bond yield is 4.99 percent, and keeps flirting with a breakout higher.
Inflation Pressures
These wage increases are inflationary. So are Trump’s new steel and aluminum tariffs.
If China halts rare earth exports, the supply constraints will be highly inflationary.
Will jobs slow fast enough to counteract this inflation?
I do not have the answer, now does anyone else. But the reprieve, if so, is more likely to be temporary than not.
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According to Senator Johnson, the current bill debt will add an additional $22 trillion to national debt over the next 10 years, from the current level of almost $37 trillion.
Since that does not factor in recession, expect things to be worse.
June 2, 2025: Government Free Money Accounts for 19 Percent of All Personal Income
Free money includes Medicare, Medicaid, SNAP, Social Security, and more, discussed below.
May 25, 2025: What Should We Do to Get Government Spending Under Control?
That’s the question I was asked today. 12 Ideas.
My expectation, as always, is that alleged fiscal-hawk Republican will cave in.
THE NO.TWO CESSPOOL CITY IN CA BEHIND SF WE ASK AVOID LA AND GO TO SAN DIEGO WHICH IS ANOTHER LALA LAND! EVERYBODY WITH MONEY IS MOVING THERE! THANK GOD FOR MORE DIRECT FLIGHTS TO MEXICO! SF RAN OUT ALL OF THE CONVENTIONS AND NO LA IS DOING THE SAME!
So what, they’ll be replaced with robots eventually so they should enjoy this bs while it lasts
Why not $60/hr?
Let’s get ahead of the curve. Why not $100/hr minimum for everyone?
These fools are trashing convention business by making it too expensive to compete against places like Las Vegas and Phoenix… cities that are hungry for the business and can now more easily compete.
This state is run by fooking morons owned by labor unions.
Ah, LA. Now I know I’ll never visit.
Insanity abounds
They just cut the wages of every skilled worker that lives there. They won’t get increases.
Michigan just increased minimum wage, again. Now servers are no longer getting decent tips even though they do NOT make minimum wage.
Plus we created mandatory PTO. Which is costing EVERY business in compliance and for many of us workers, they just cut our existing PTO and now I have to “earn” it hourly instead of getting the chunk for the entire year. Thanks voters and legislatures, I’ll never get a paid vacation now.
These actions have real consequences for the rest of us.
These things, to name but a few, lead me to believe the democrats are using Cloward-Piven strategy to collapse our entire system.
Run small companies out. Check and thanks Clinton & Obama
Run government up. Check
Bring in millions to drive wages down while simultaneously bankrupting the government. Check.
And how people still think the Dems give a crap about the American working class is beyond me.
I would reincorporate my 240 room hotel as four 59 room hotels and 4 apartments.
Very boutique-ish.
Couldn’t they simply equate pay for those workers to pay for doctors, attorneys and politicians? Oh, and school/university administrators.
This “Minimum Wage” issue is clearly and completely out of control! The Min. Wage was created to lift the lowest rung workers up automatically, as they were being unfairly taking advantage of financially for their efforts. Not to mention the stigma that was disgustingly socially attached to these hard workers. It was meant, in essence, to set a standard fair wage you must be paid for your efforts. This in no way guarantees employment, but rather a bottom rung level of pay that is mandatory, if you’re willing to work hard for it (like all jobs should be), and produce the expected results for that role.
Of course like most rules, with good intentions, it has been hijacked by the users, con artist, and takers. Now it’s being socially used as a tool (Law) to ask for higher and higher wages, to meet the ever climbing expenses of living life. The money makers have turned this law into a slush fund for higher wages, which of course means higher cost to pay for them, and the bump ups that come along with wage hikes, to pay more and more for, as those wages increase. In essence it’s become a pay raise for products being sold to the lower rung workers
(Human Beings) by the manufacturers of these products.
So in essence the low rung workers never really feel the wage increases, ever, because they are simply rolled up immediately into the cost of their goods. As many people have said, and constantly I might add, “Follow The $$$” and you will always find the answer as to Who, What, Where and Why. Minimum Wage is now largely in that category of “unintended consequences” or maybe “Intended Consequences in this case, No?
Minimum Wage “Does Not Equal” a Living Wage. It was meant as a starting point into the world of WORK, and not to a raise a family of 5 (it was actually 3) on it!! Young and Old we’re the intended target audience, allowing them to earn enough to exist, which is now EVERYONE I guess…
Hmm… Maybe Cost are too high, and Profits are too high, and maybe we have simply raised living cost, SO HIGH, that No Minimum will work at this point, unless its around $40 per hours OR $80,000 per year!!!
P.S. They Added “Free Food” via food stamps, so I guess the min isn’t working if they can’t feed themselves too, and then they added home cost or rental cost (sec 8) to be assisted as well, as again the min just doesn’t seem to be working, as “They Keep Raising It” and as they do, “Prices Keep Rising” Hmm… seems odd, No?
California has job specific minimum wages. For example there’s one for fast food workers. I think there’s one for hospital workers too.
I’d like to see a proposition to make all minimum wages the same in the state. I don’t have a problem with minimum wage, but making them job specific allows it to go off the rails.
For context does anyone know the average wage for hotel workers in Los Angeles, before this new law? I’d hope this new minimum is below that average.
$30.00 per hour is low income in Los Angeles.
It’s to force more people out of State benefits. Case in point: Here in the Midwest a lot of lower-management in some businesses refuse salary raises that their bosses are giving them, because that would make them lose State benefits (free kindergarten etc).
It’s called the Welfare Cliff.
“With benefits, the effective wage is $38.35. This is inflationary.”
No kidding. Looking forward to announcement from Motel-6 that they’re not “going to leave the lights on for ya” in Californication.
I was reading the other day that the hotel rates in Half Moon Bay, CA, a Pacific ocean coastal “resort” town, ranged from something like $400-$600/night!
Yes, I know this might be list price and many people don’t pay this full price but trust me, HMB is nothing to get excited about or pay such high hotel prices, even if they were 50% less.
Good, force Trump to pay his workers.
look out!! orange man bad is right behind youi!!!
Welcome to the nanny state of CA! Fast food workers get a minimum $20/hr. The state had previously set a minimum wage for all healthcare workers (this includes janitors and other maintenance workers who just happen to work in a healthcare facility) of $25/hr by 2028, depending on company size.
All this is going to do is hasten the speed that companies embrace automation and robot workers to replace human workers.
I hate unions and minimum wage. But how many of you have spent any time in California? If you live in Arkansas, $30 an hour is outrageous. However, $30 an hour gets you nowhere in California, especially LA. This is not flipping hamburgers for teenagers, this is at a higher level of work. Maybe a lower wage and including tips might work. But $15 an hour in LA for hospitality work is a joke.
Earnings are one of the major factors that help to manage the rise of prices in an economy. WHen politicians are allowed to dictate specific wages for favorite union constituencies, it causes others to get dragged along and raises the prices of everything else in those economic regions.
Politicians constant meddling in an attempt to “do good” is a big reason that costs like apartment rents for a 1-bedroom are $2500+ in my area of CA (near SF)..
Look, I agree, but you will not have workers for $15 an hour. The problem is far more complicated and deep, starting with government spending. No one will work in California for $15 because the welfare system pays more. So pick your poison.
You are telling me that the hotel maid, bus boys, porters etc in the hotels and cashiers, hostesses, shelf stockers etc in airports are a higher level of work than flipping burgers? Please be serious.
Actual work that does require a higher level pays a higher wage. Or they wouldn’t have anyone working those jobs or wouldn’t be able to keep anyone once they trained and could go elsewhere.
Stop saying that or California libtards will start flooding into Arkansas and ruin that too
A $30 minimum wage for unskilled labor will lead to an effort for skilled labor to ask for more. Politicians are hoping higher wages translate into more tax revenue.
Nah, it’s a race to the bottom. visit most fast food restaurant out here and look what has happened. Kiosks have replaced people. Kiosks don’t get OT, benefits or tax revenue to the state. This is an exercise in administering an appropriate tongue bath to union thugs.
Martin Luther King said “One day we will learn that the Heart can never be totally Right when the Head is totally Wrong.” These Los Angeles politicians might have been guided by their Hearts when giving these large wage increases but when will they also start using their Heads?
Full time that works out to $60k a year. How far would that go in LA? Here in the northeast you could maybe barely get by on that. Rent on a 1 bedroom apartment would eat 1/3 of it.
This is why 1-bedroom apartments often have one person on the lease but 4 people living there. These extra people use more services, such as garbage and overload neighborhood parking.
So here you complain that it’s not enough to get by on without piling into housing and spreading the misery, but elsewhere in the comments you complain that it’s a nanny state that guarantees a minimum wage… your arguments are contradictory and incoherent
Not at all. I am always consistent, in the bathroom and with what I write. The problem is your inability to read with comprehension.
Wait a god damned minute. Smart people with degrees who teach make less than this. I mean fuck you Los Angeles if this is how you prioritize work. Take your fucking children and go to hell.
I know some “smart people with degrees who teach” they wouldn’t last a week working for a living.
I spotted somebody whose teachers told him he wasn’t that bright 😀
KTLA had a story the other day, of a new California tourism campaign aimed at Canadians, who are booking less trips here due to Trump’s recent comments.
Robots to check you in and handle your bags at the hotel. Self driving cars to shuttle you back and forth from the airport to the hotels and your rental car.
CA never ceases to amaze, or learn from it’s past mistakes. But look whose running the place. Someone born with a silver spoon up his ass and who has never really accomplished anything.
“The state has asked Congress for $40 billion to help Los Angeles recover from the fires.”
Rick Caruso, who ran against Mayor Bass, commented the other day, on a new report which concluded that the Palisades Fire was manageable if handled properly.
Throw in $8 gas and things are going to get interesting.
People will buy more EV’s.
LA and Cali are embracing inflation as the answer to everything. For all I know, maybe that’s best for them. In my dotage I am merely trying to subsist.
We used to call Santa Monica the people’s republic of Santa Monica. That moniker is more apt for the City of Los Angeles today. Unfortunately when we have council districts with 80% renters this is the kinda politics that results…
This will definitely accelerate the robot takeover of all jobs they are capable of performing.
Correct
The prime candidates for AI/robot replacement are in the FIRE sector including financial blogs. You can’t tell me that humans write all that nonsense over on “Market Watch” ?
Some groups are probably wondering if it is too early to start the “Fight for $40”.
Depreciation of the currency makes it increasingly difficult to keep up!
Barbara Lee is currently Mayor of Oakland, CA (across the bay from San Francisco).
At that rate Treasury will have to scrap all coinage and maybe everything below the sawbuck. When that happens the currency won’t be worthless, just worth (a lot) less!
Homelessness is up nation wide. It’s not just the drug addicts or mentally ill. It’s people working jobs who have to live in their cars because their pay doesn’t cover the rent.
So, what’s the solution? Somebody has to do the low end jobs in society and if they don’t pay enough to cover rent for even a low end share rental, where’s the incentive to work?
Solution is robots.
Most people that are homeless are so because of the choices they made in their life. Should society backstop people’s poor choices that might drive them into homelessness?
Brilliant!
Robots will put an end to homelessness since robots don’t need homes – or have choices to get wrong.
mish. this is Trump’s fault and all things negative. it is a repeat of Obama’s mantra for 2-3 years after Bush. DEMs do not make mistakes.
no comments on the new DEM ‘Abundance’ platform to recapture the middle and working class, or 90 new VA hospital services, environmental regulatory changes. you might find reading Jonathan Turley to check in on what is actually occurring
I remember when LA held the games in 84 and came in under budget. One of the few Olympic games to ever do so.
Atlanta in 96, 12 years later was barely completed. Since then the only Olympics in the US was the 02 Winter games. It’s been 30+ years when it never used to go more than 10-12 between the US hosting games of some kind. Now it seems the US can’t manage to host any kind of games any more which is a very sad statement on how things have gotten.
The union rep threatening strikes is what happened in 3rd world countries like Brazil before their Olympics. Mish is wrong, Congress needs to help just like they are helping in the Carolinas after last years Hurricanes. But they should do what the Wall Street Journal suggests and tie that aid to no mandates and no strikes before the Olympic games or authorize use of scabs for Hotels to show that work can and will be done for a lot cheaper price.
Like you couldn’t hate LAX enough, they go off and do something like this. The last time I was traveling domestically I had a two hour layover so wandered around a (non-LAX) airport to find lunch. Just a hamburger was $20 – and this seems to be the new normal at all airports. I expect an LAXburger to be $30 or more after this, don’t see how anyone not on an expense account will be able to eat at any airport.
All courtesy of the TSA scam that won’t let you bring in food or drink. They need to relax that so people can bring their own water and food.
bring an empty fill it inside from faucets. oakland has them setup for that
You trust the Oakland city water?
Still doesn’t help with food. There is no reason we can’t bring our own food and drinks with us instead of being forced to vastly over pay as a captive audience.
Wrong!
Those people are all crazy