(The Center Square) – Glendale residents will have the opportunity to decide whether or not to raise minimum wage and benefits for hotel and event workers this November. The Hotel and Event Center Minimum Wage Protection Act, proposed and funded by the Worker Political Action Committee, will be on the ballot this year and while it seems to stem from good intentions, a report from the Common Sense Institute of Arizona says it could have detrimental economic impacts.
The initiative not only states that hotel and event centers workers must earn a minimum of $20 per hour, but it would also set a limitation on the amount of square feet a room attendant is required to clean before the employer must pay twice the hourly wage, it would require employers to distribute service charges to the employees who performed those services and lastly, the city of Glendale would be required to enforce these rules.
Arizona’s minimum wage is $14.35 per hour and the average hourly rate for hotel and event center employees is $17.02 in 2023.
“To fulfill its obligations under the Ordinance, CSI estimates that Glendale may need to add 5-10 full-time equivalent positions, depending on the volume of new work created by these requirements,” reads the CSI report. “That would require the city to incur a cost of between $995,000 and $1.9 million annually, given comparable per-employee costs at the state Industrial Commission.”
Not only would it cost the city money, it could completely derail Glendale’s highest form of income – tourism and events, which contributes $20 billion to Arizona’s economy.
“Passage of the Wage Protection Act would reduce Gross Domestic Product (GDP) in Glendale by between $120 million and $1.9 billion,” reads the CSI report. “The city’s events and accommodation sectors would be hit hardest; together they represent an estimated 8.2% of the city’s entire economy.”
The the group behind the measure did not respond to a request for comment in time for publication.
CSI predicts that impacts of the act would include the elimination of current jobs, reduced work hours and could even result in the industries moving outside the city. The report notes that due to Glendale’s urban-surrounded geographical location, it would be easy for the tourism and entertainment industries to move outside of Glendale where there would be less restrictions.
“Glendale has heavily invested in developing its tourism industry,” reads the report. “Though it is only about 3% of the state’s overall economy, CSI estimates Glendale hosts about 13% of the state’s entire sports and tourism sector and it comprises 8% of the city’s economy…. Depending on how the industry responds to the new policies, between 1,700 and 32,000 Glendale jobs could be impacted.”
The report uses California as an example of how minimum wage increases could negatively affect the economy. This year California enforced a $20 per hour minimum wage requirement for fast food workers, which has led to reduced hours, lay-offs and limited overtime pay.
“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,” reads the report. “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).”
CSI predicts that the Act’s consequences would fall between hotels and event operators absorbing the costs through price increases, employment reduction and increased wage costs and the relocation of the tourism and events sector to outside of Glendale.
The decision will be up to Glendale residents and they will have the opportunity to vote it into law in the general election.
