Following the green light for a minimum wage hike to $15 an hour in Seattle, The American Hotel & Lodging Association (AH&LA) and the Asian American Hotel Owners Association (AAHOA) jointly released a study showing how minimum wage increases could negatively impact the US hotel industry.
A research paper entitled ‘Extreme Wage Initiatives and the Hotel Industry: Impact on Local Communities and the Nation,’ suggests nationally, over 12,000 hotel positions could be lost and annual guest room revenue could drop by over $600 million.
The study author, John W. O’Neill, Ph.D., of the school of hospitality management at Pennsylvania State University based these figures on an average minimum wage of $10.10 per hour nationally similar to a proposal that was blocked in the Senate.
AAHOA Chairman Pratik Patel said the study’s findings highlight a potentially "destructive impact on entry-level workers and job opportunities" in hospitality.
"As an industry, we should not be faced with such a significant economic hit as these are risks we simply cannot afford to take," said Katherine Lugar, AH&LA CEO.
The Congressional Budget Office previously said the implementation of a minimum wage of $10.10 per hour could result in the loss of 500,000 jobs nationwide.
The study also looked specifically at Los Angeles where hotel worker groups have been pushing for a minimum wage of $15.37 an hour.
It said hotel values in Los Angeles could eventually drop by $20 million if the proposal became law.
A separate study estimates 40% of LA hotel workers live below the poverty line.
