By Matthew Holloway |
The Common Sense Institute of Arizona (CSI) released a report Wednesday which outlines the implications and economic impact of the City of Glendale’s far-reaching “Hotel and Event Center Minimum Wage Protection Act” (Prop 499). The act is set to be considered by voters on November 5.
The initiative, launched by the non-profit organization “Worker Power Political Action Committee,” has been challenged by the City of Glendale on the basis that it violates the State of Arizona’s “Single Subject Rule” limiting initiatives to act upon a single issue, The case is now headed to the State Supreme Court according to AZ Central.
The report from CSI Arizona details that the initiative, if it becomes law, would mandate that hotel and event center employers pay their staff a minimum of $20 per hour, and places narrow restrictions on the duties they may perform and the duration for which they may perform them. As Brunner explains, “For example, it prescribes how many square feet can be cleaned in a hotel before the employer is required to pay twice the room attendants’ regular rate of pay for each hour worked during that workday, and establishes new requirements on how Hotel and Accommodation firms treat certain revenues and records.”
The act would furthermore require the City of Glendale to create an entirely new enforcement division in order to enforce the mandate and hire staff to conduct investigations. It would also price non-union labor out of the market per the report.
The CSI found that the new law, if enacted, would, “reduce Gross Domestic Product (GDP) in Glendale by between $120 million and $1.9 billion.” Given that the city’s event and accommodation industries account for approximately 8.2% of Glendale’s entire economy, the blow to the city’s tax base could be severe.
“Depending on how the industry responds to the new policies, between 1,700 and 32,000 Glendale jobs could be impacted. Impacts will range from the elimination of existing jobs subject to the new rules, to reduced work hours, to the movement of jobs outside the city. How much of each and when will determine where things fall in this range.”
In a post to X, the CSI explained, “The Minimum Wage Act would impose significant costs on the city of Glendale, requiring the creation of a new Department of Labor Standards to enforce the Act’s provisions. CSI estimates the city would need to spend $995,000 to $1.9 million annually to manage these new requirements.”
Compellingly, the CSI report referecnces similar policies put in place around the country as “instructive examples,” of the likely ramifications of enacting the restrictive law.
“This year California instituted a $20 per hour minimum wage for fast food workers leading restaurant owners to reduce staff hours, lay off part-time staffers, and limit overtime pay. Also this year, Long Beach, CA passed a ballot initiative instituting a $23 per hour minimum wage for hotel workers. On the consideration of increasing hotel and airport workers’ minimum wage to $25 per hour, the President of the Valley Industry and Commerce Association said ‘increasing the hourly wage by $6 or $7 this year alone could cost an employer about $14,000 more per worker.’ For Arizona to pass a $20 minimum wage for hotel and event center workers in Glendale, it could cost employers up to $10,756 per affected worker -through a combination of either direct increased wage costs or efficiency losses as employers mitigate the impacts by reducing staff, cutting hours, or moving business activity. Much of this cost will likely be passed onto consumers in the form of higher prices and increased fees (as has been the case in California). This may further incentivize both customers and operators to seek alternatives outside the city.”
With Glendale and the city’s businesses banking heavily on the much ballyhooed Mattel Adventure Park at the VAI Resort set to open in late 2024, according to a park representative, and the growing impact of the Westgate Entertainment District and State Farm Arena on the local economy, the impacts of this measure could be devastating.
Matthew Holloway is a reporter for AZ Free News. Follow him on X for his latest stories, or email tips to Matthew@azfreenews.com.
