As Los Angeles gears up for the 2024 election, the city finds itself at the epicenter of a fierce political showdown between business and labor interests.
In what is being described as a historic battleground, six major measures are vying for a spot on next year’s citywide ballot.
Four of these measures have been introduced by labor unions, including a provocative initiative to raise the minimum wage to $30 per hour for all workers across the city.
Conversely, a coalition of business groups has taken the initiative to challenge the labor-backed tourism wage ordinance through a referendum, while simultaneously advocating for the repeal of the city’s gross receipts tax.
Experts note that this aggressive stance from business groups is unprecedented in Los Angeles’ modern political landscape.
Fernando Guerra, a political science professor at Loyola Marymount University, remarked, “This represents a counterattack by business interests,” highlighting a shift from a predominantly reactive lobbying strategy to a more proactive engagement through ballot initiatives.
The outcome of these initiatives could have significant implications for Los Angeles’ business environment for years to come.
Among the most contentious issues is the newly enacted tourism wage ordinance, which was signed by Mayor Karen Bass in May.
This ordinance mandates a gradual increase in wages to $30 an hour for large hotels and private airport workers by July 1, 2028.
In response to this legislation, a coalition of hotel owners and airport businesses mobilized to place a referendum on the June ballot, seeking to overturn the ordinance.
With over 140,000 signatures submitted—well above the required threshold—this coalition is now awaiting certification, despite challenges from labor groups like Unite HERE Local 11, who allege inappropriate practices in the signature-gathering process.
Guerra notes that operative strategies from previous labor initiatives are now being employed by businesses, reflecting a significant shift in political tactics in Los Angeles.
Following the referral of the tourism wage ordinance for a ballot, Unite HERE Local 11 retaliated swiftly, proposing four initiatives directed at next year’s ballot.
The first measure aims to extend the tourism wage ordinance to apply to all city businesses, ultimately fostering a citywide minimum wage of $30 an hour by 2028.
Kurt Petersen, Unite HERE Local 11’s co-president, emphasized that the measure counters claims from the hotel industry that the ordinance unfairly targets them.
Business representatives, however, have voiced strong reservations.
Stuart Waldman, president of the Valley Industry and Commerce Association, warned, “If this $30 minimum wage for all businesses in the city passes, there will be layoffs in droves and an exodus of businesses from the city on a massive scale.”
In addition to the minimum wage legislation, the second proposed measure involves a mandate for citywide voter approval on all hotel and event center projects receiving any form of city financial assistance.
It also stipulates voter consent for developing any hotels exceeding 80 rooms or event centers over 50,000 square feet within city limits.
Petersen expressed skepticism regarding the necessity of taxpayer subsidies for high-revenue companies, raising the question of whether voters should have a say in such financial decisions.
However, significant apprehensions have been voiced concerning the potential impact of this measure on venues for the upcoming 2028 Olympics, particularly temporary facilities being developed.
Nella McOsker, chief executive of the Central City Association, has highlighted concerns that this voter approval requirement may jeopardize long-planned expansions for the Los Angeles Convention Center.
“Given the enormity of this undertaking, we’re worried this measure could derail progress,” she stated.
Two additional measures proposed by Unite HERE Local 11 focus on executive compensation.
The first proposes a 0.5% surcharge on the city’s gross receipts tax for firms with over 500 employees that pay executive salaries exceeding 100 times the median compensation of their Los Angeles employees.
The second initiative seeks to compel voter approval of contracts with companies that exceed this pay disparity threshold, focusing specifically on those using city-owned property.
Maria Torres, a dishwasher representing Unite HERE, conveyed the rationale behind this proposal, stating, “If large corporations are contributing to inequality, it’s just that they should pay more in taxes for city needs.”
Business leaders have expressed concerns about these measures, suggesting they could deter crucial economic activities, including film productions that rely on city streets.
On the flip side, the repealing of the city’s gross receipts tax is another significant measure pushed by business coalitions including the Central City Association and the Valley Industry and Commerce Association.
This tax, which currently garners over $800 million annually, has been described as burdensome, as it’s calculated based on gross revenue regardless of a business’s profit status.
Supporters of the repeal argue that eliminating this tax could stimulate business growth and relocation back into Los Angeles, thus increasing other forms of tax revenue for the city.
Bryan Olson, co-owner of 8one8 Brewing, echoed these sentiments, declaring that Los Angeles must adapt to retain its competitiveness in the business landscape.
“Businesses are finding it increasingly unaffordable to operate here,” he lamented.
Despite the momentum behind the repeal effort, Guerra indicates it will face substantial opposition, particularly from unions and city officials who worry about potential negative repercussions on city finances.
He remarked that if the repeal goes through, it might prompt severe budgetary implications that could affect vital city services.
As the political landscape evolves, Guerra affirms that Unite HERE’s primary objective remains the mobilization of voters to uphold the tourism wage ordinance and potentially support the $30 minimum wage initiative.
He also speculates that the additional measures proposed by Unite HERE could be strategic bargaining tools in forthcoming negotiations with city officials.
In closing, as Los Angeles approaches the critical 2024 election, it remains to be seen how these measures will shape the business environment and the city’s overall economic future.
In Guerra’s view, the visibility of such an intense labor-business conflict is unprecedented in the city’s political history, setting the stage for a transformative electoral battle in the months to come.
image source from：labusinessjournal
