Members in the News: Beware Unintended Consequences

To be clear, Airport Restaurant & Retail Association (ARRA) members support livable wages for their valued associates. In fact, ARRA members at many airports – including Los Angeles International – offer wages and benefits that exceed minimums set under various living wage ordinances. But we warn of unspoken and unintended consequences of well-intentioned efforts to legislatively impose wage rates. In a recent opinion column in the Los Angeles Daily News, ARRA board member Greg Plummer cautions that Los Angeles’ proposed $30 minimum wage is not a boon, but rather a threat to hospitality and airport workers and their employers.


Greg cites a number of potential unintended consequences of the proposed 66% increase in the City’s minimum wage for only some – not all – of its businesses: the increased minimum wage disproportionately impacts small businesses; research consultancy Oxford Economics predicts lower tourist spending and reduced local tax revenue; and heightened risk of business bankruptcy and subsequent job losses. Moreover, the consequences are worse for airport businesses who have, as Greg describes, “nuanced contract terms” that effectively prohibit cost recovery. ARRA supports livable wages. Nonetheless, any additional increase in statutory minimum wages and benefits must be combined with a stable business framework for the mutual benefit of traveling public, associates, airports, and concessionaires.


There is much to consider. We urge you to read Greg’s column in the Los Angeles Daily News here.