Major airlines and business leaders are pushing back against Los Angeles City Hall’s proposal to significantly raise the minimum wage for employees at LAX by the time the Olympics hit the city.
At the center of the showdown is the city’s controversial “Olympic wage” mandate approved last May, requiring large hotels and businesses operating at Los Angeles International Airport to steadily raise wages ahead of the 2028 Olympics until workers eventually earn $30 an hour along with expanded healthcare benefits.
Labor groups celebrated the law as one of the most aggressive wage mandates in the nation.
Business leaders warned the increase in pay would slam hotels, airlines, restaurants and tourism operators already battling rising costs, slowing visitor traffic and mounting economic pressure.
After failed negotiations with City Hall, business groups escalated the fight politically — taking their battle directly to voters with a measure that would let businesses stop paying the business tax.
Backed by major airlines, hotel operators and business organizations, they gathered enough signatures to force a separate business tax repeal measure onto the November ballot.
If voters approve the repeal, Los Angeles could lose roughly $860 million a year by eliminating the city’s business tax, one of its largest revenue streams that helps fund core services and a major portion of the overall budget.
“We tried to negotiate beforehand, tried to work with council members, tried to work with labor,” Stuart Waldman, president of the Valley Industry and Commerce Association, told The California Post. “No one at any point said don’t raise the wage. We said let’s just do it in a smart way.”
That ballot measure became leverage Wednesday.
Business leaders made clear the repeal effort was designed to force City Hall back to the negotiating table. They argued that if meaningful negotiations happen, and portions of the wage package are revised, delayed or scaled back, they would be willing to remove the business tax repeal effort before it reaches voters.
“We took a page out of labor’s playbook,” Waldman said. “If we couldn’t get a seat at the table, we were going to force one,” he added the economic fallout of the wage hike is already hitting Los Angeles development projects and jobs.
“It’s already challenging to build anything in the city,” he said. “The tourism industry especially has been so hard hit.”
Inside council chambers on Wednesday, the political pressure exploded into six hours of negotiations, emotional testimony, labor chants and warnings of economic collapse.
Hotel worker Manny Cabrera told councilmembers that “after nine years, I still struggle to make rent.”
Another tourism worker, Ana Palacios, blasted councilmembers for revisiting a wage package workers believed had already been settled.
“We won by fighting in the streets,” Palacios said. “What do you need to see from us for you to be able to understand that we need these Olympic wages?”
Still top budget officials warned the repeal would blow a massive hole in city finances.
Chief Administrative Officer Matt Szabo warned the repeal would create an “unprecedented fiscal vacuum” and force “austerity measures far more severe than those seen during the Great Recession or during the COVID-19 pandemic.”
Szabo went even further, warning that thousands of layoffs, a hard hiring freeze and major cuts to city services would become unavoidable if voters ultimately approved the repeal measure.
“The primary responsibility for whoever occupies the seats around this horseshoe,” Szabo warned councilmembers, “will be to oversee and implement a systematic and permanent degradation of our most vital city services.”
Councilmember Imelda Padilla described the presentation as an “economic apocalypse for the city.”
Councilmember Hugo Soto-Martínez, a former Unite Here Local 11 organizer and one of the leading architects of the Olympic wage push, defended the mandate during the heated debate and warned against what he described as dangerous concessions to employers.
“I was against Item 20 before it was put on the agenda,” Soto-Martínez said. “I am against Item 20 as a substitute.”
Councilmember Eunisses Hernandez also fiercely opposed weakening the wage package, accusing corporate lobbyists of trying to strip workers of hard-earned protections after years of organizing.
Meanwhile, Councilmember Monica Rodriguez emerged as one of the few councilmembers openly defending restaurants, hotels and tourism operators, warning colleagues they were risking severe economic damage to industries helping fund the city itself.
“We have to talk about the businesses that will cease to exist if we adopt policies without any regard to the implications,” Rodriguez warned. “We’ve seen several hotels go up for sale on a fire sale. We’ve seen several restaurants close down.”
Rodriguez also warned councilmembers they could end up creating “the best paid unemployed workforce” if businesses collapse under mounting costs.
In the end, the Council voted to continue negotiations until next Tuesday and directed the City Attorney to prepare revised ordinance language by May 18.