Lawmakers Must Act Now to Prioritize Jobs and Protect Mom-and-Pop Businesses | Commentary

Posted September 4, 2014 at 10:24am

When the Bureau of Labor Statistics releases its August Employment numbers on Friday, it is expected to reinforce the trend we’ve been seeing for months: The hospitality sector is one of the few bright spots in the economy. In fact, the data shows month-after-month growth, with numbers higher than they’ve been since June 2008.

And while that’s obviously good news for the hotel industry, what the data shows is that this sector is hiring. These are not just any jobs, either. A just-released survey of hotel employers, conducted in partnership with WageWatch, Inc., a leading compensation survey provider, shows that the hotel industry offers high-paying jobs, with benefits and a fast-track to upward mobility. Among the findings: Almost half of the employers in our industry pay the overwhelming majority (75 percent) of their employees above minimum wage; more than 80 percent of minimum wage workers are eligible for promotion in less than a year; a full 100 percent are eligible for promotion in less than two years.

The survey represents a wide swath of our industry, not just big brands and big business. It includes many independent and small business owners, who make up a large percentage of the hotel industry. And it is these small business owners who are now being unfairly targeted by actions in Washington — and by some local governments — that threaten their ability to remain competitive and keep offering good-paying jobs.

In the halls of Congress and in state capitals around the country, lawmakers around the country must put workers first by doing more to protect job creators. After years of struggling, the economy is moving in the right direction. But now all that is threatened. And we’re seeing it at the local level too.

From local extreme wage battles in cities such as Seattle, Chicago and Los Angeles, to a recent ruling by the National Labor Relations Board upending the 30-year-old franchisor/franchisee relationship, these moves unfairly target mom-and-pop businesses who work hard to create good jobs, thriving main street businesses and strong communities.

In July, the Obama administration issued an Executive Order that could prevent federal contractors with a long-standing and reputable track record of bidding on or being awarded any federal contracts because of minor labor violations, including administrative ones such as paper work infractions. That decision came on the heels of an NLRB General Counsel ruling that McDonald’s Corporation and its franchisees can be considered a joint employer in certain circumstances. This recommendation stems from unfair labor practice charges brought against the McDonald’s Corporation and could result in dangerous and precedent-altering changes to the joint employer standard, which would hurt our nation’s small businesses in the lodging sector and other industries that are creating today’s jobs.

In cities around the country, small business owners are also being threatened by efforts to increase local wages at steep increments in tight timeframes. Study after study published by reputable economists show that extreme wage increases can result in the loss of thousands of jobs, cuts in employee benefits, loss of customer services, increases in prices and even the closure of some local businesses — all consequences that negatively affect the community economies that they purport to help.

The most egregious example of these arbitrary extreme wage initiative is in Los Angeles, where one proposal on the table before the city council calls for a 60 percent wage increase targeting ONLY hotels, even though the hotel industry in L.A. has a proven track record of paying its employees, on average, above minimum wage already.

With Congress and some state legislatures back in session, we need lawmakers to focus on laws and regulations that help businesses grow. And as election season swings into high gear and members travel back to their hometowns, I strongly urge them to take some time and talk to our industry’s small business owners and hear directly how decisions in Washington, as well as state capitols and city halls around the country, hurt at home. With the hotel industry representing some 2 million employees and contributing more than $155 billion in lodging tax revenue, it’s imperative that these businesses are allowed to flourish, so that they can continue to grow jobs and keep the American economy strong for everyone.

Katherine Lugar is president and CEO of the American Hotel & Lodging Association.