Here’s what happened.
A sweeping minimum wage increase backed by Democrat leaders in Los Angeles is already triggering layoffs and business cutbacks across the city’s hotel industry, raising new concerns that the policy could harm the very workers it was designed to help.
The controversial law, signed by Los Angeles Mayor Karen Bass in May 2025, will gradually raise the minimum wage for hotel and airport workers to $30 per hour by 2028. Supporters argued the increase would help workers earn more ahead of the 2028 Olympic Games, which the city will host.
But hotel industry leaders say the policy is already creating unintended economic consequences.
According to the Hotel Association of Los Angeles (HALA), hotels have begun cutting jobs, reducing hours, and delaying development projects as they struggle to absorb the rapidly rising labor costs.
Hotel Industry Warns Wage Mandate Is Unsustainable
Dr. Jackie Filla, president of HALA, says the city has forced hotels into an impossible financial position during a time when Americans are already struggling with inflation and affordability.
“The city of Los Angeles has imposed a wage and benefits package that many hotels simply cannot afford,” Filla said. “This is happening at a time when families and businesses are laser-focused on rising costs.”
To measure the early effects of the policy, HALA commissioned an industry study examining how hotels are responding to the wage mandate.
The findings were concerning.
The report found that approximately 6 percent of hotel jobs—about 650 positions—have already been eliminated or are expected to disappear since the ordinance began taking effect in September 2025.
Industry leaders warn the job losses could accelerate as the wage increases continue.
Minimum Wage Increase Already Affecting Workers
The law is being implemented gradually.
In July 2025, the minimum wage for hotel and airport workers rose to $22.50 per hour. The wage will increase incrementally over the next several years until it reaches $30 per hour in July 2028.
City officials have referred to the policy as the “Olympic Wage,” connecting the wage increases to the global sporting event expected to bring millions of visitors to Los Angeles.
However, business leaders say the policy is already creating serious challenges.
“We are only at the beginning of these increases, and hundreds of hotel workers have already lost their jobs,” Filla explained. “Many more employees are seeing their hours reduced.”
Restaurants Closing and Projects Delayed
The financial strain is spreading throughout the hospitality sector.
Hotels are reporting several cost-cutting measures already underway, including:
- Restaurants inside hotels shutting down
- Parking costs rising for guests
- Renovation and improvement projects being delayed
- New hotel construction plans being canceled or postponed
Taken together, industry leaders say these changes could slow job growth across the city just as Los Angeles prepares for a major international event.
“These impacts should be a serious warning sign for policymakers,” Filla said.
Blue-Collar Workers Losing Opportunities
Ironically, many of the positions being eliminated are the same entry-level jobs that traditionally help workers build long careers in hospitality.
The HALA study found that many of the cuts are occurring in labor-intensive roles, including:
- Housekeeping
- Food and beverage service
- Parking and valet operations
These positions often serve as stepping stones for workers hoping to move into management roles.
Filla noted that many hotel managers began their careers as dishwashers, cooks, or entry-level staff before advancing through training programs.
However, as hotels tighten budgets to handle higher labor costs, those training programs may become less available.
Hotels Expect More Hour Reductions
The study also found that many hotels expect additional staffing changes in the coming years.
Approximately 62 percent of hotels anticipate reducing staff hours in 2026, while three-quarters expect those cuts to reach at least 10 percent.
Industry experts warn that these reductions could make it harder for workers to earn consistent pay, even if the hourly wage rises.
Impact Spreading Beyond Hotel Employees
The ripple effects are extending well beyond hotel payrolls.
Many hotels rely on outside vendors and subcontractors that operate on hotel properties, including cleaning services, maintenance companies, and transportation providers.
According to HALA, about two-thirds of these third-party vendors expect to raise prices to offset higher wages.
Meanwhile, roughly one in five contractors may cancel their hotel partnerships entirely, creating additional disruption in the hospitality sector.
Critics Say Policy Is Driving the Job Losses
Industry leaders argue that the layoffs now occurring were not caused by economic downturns, but by government policy decisions.
“Unlike typical layoffs happening in other industries right now, these job losses are policy-driven,” Filla said. “Hotels want to maintain and grow their workforce, especially with major international events coming to Los Angeles.”
However, she said the rapid increase in labor costs is making that goal difficult to achieve.
As the next rounds of wage increases approach, many business owners say city leaders may need to revisit the policy to avoid further economic damage.
With the 2028 Olympics approaching, the debate over the wage mandate is likely to intensify—especially if job losses continue to mount.
