If the city government of Los Angeles is not exactly the same as a protection racket shaking down local businesses, you wouldn’t want to try to live on the difference. The city has just approved its latest specially-selected minimum wage increase. The lucky recipients are the roughly 23,000 hotel and airport workers represented by unions that can make or break a Democratic politician’s career. Or racket. You wouldn’t want to try to live on the difference. The unlucky shakedown targets are the hotels and airport concessionaires that now will be required to pay a minimum hourly wage that ratchets up to $30, plus an $8.35 per hour health insurance payment, by July 2028. Currently, as a result of the last shakedown law, the minimum hourly wage for airport concession workers is $19.28, and $20.32 for hotel workers. For comparison, the minimum hourly wage in the city of Los Angeles is currently $17.28 per hour. The city government commissioned impressive-sounding research before granting all the wishes of the powerful unions. An economic analysis from Berkeley Economic Advising and Research (BEAR) last fall stated, “the tourism and travel industries in Los Angeles are rebounding rapidly from the COVID-19 pandemic.” But this claim is disputed by the tourism and travel industries. “In fact,” wrote the Hotel Association of Los Angeles in a letter to City Councilmember Traci Park last September, “tourism has not returned to pre-pandemic levels.” The trade group cited a Los Angeles Times report that 75 million passengers traveled through LAX in 2023 compared to 88 million in 2019. In addition, hotel tax revenue was almost $20 million lower than projected in the 2023-34 fiscal year. And according to the Los Angeles Tourism and Convention Board, the city was projected to have 25 to 28 conventions in 2024 but there were only 17, down from the 21 conventions held in L.A. in 2023. “When the first Living Wage Ordinance was passed in 2013, travel and tourism in Los Angeles was booming. Hotels were on a seven-year market upswing and interest rates were at record lows,” the association wrote, “Opposite market conditions exist today.” Obviously the hotel industry is using a different set of metrics to evaluate the economic feasibility of a giant gift to powerful unions. The election calendar for L.A. mayors could be a more reliable indicator, especially if it’s mapped to endorsements in previous elections. Unions are big-money donors to Democratic party politicians. They get what they want, or a different politician gets the big money. The purported reason for the selective minimum wage hikes is the impending arrival of the 2028 Olympics, supposedly a gold mine for these employers that must be shared equitably with the minimum-wage workers who make it all possible. But the hotel industry disputes that the Olympics are a gold mine. L.A. area hotels agreed as part of the city’s bid for the Olympics back in 2017 to set aside blocks of 40,000 rooms at below-market rates in the midst of the summer travel season. Now it’s possible that the hotels will pull out of those signed agreements because the new wage law changes everything. In its letter to Traci Park, the hotel association pointed to preliminary data showing that the Paris Olympics resulted in “high vacancies and low revenues during what normally would have been the height of tourist travel season.” It cited a report from the leading tourism association in France, which predicted that “receipts from the Games will not make up for the occupancy drops experienced in June and July prior to the event.” L.A.’s new ordinance applies to any hotel in the city with 60 or more rooms. The minimum hourly wage for hotel and airport workers jumps every July: $22.50 in 2025, $25 in 2026, $27.50 in 2027 and $30 in 2028. Instead of negotiating contracts with employers the old-fashioned way, unions in California have discovered they can buy politicians who will use the force of law to do it for them. The problem comes in when businesses leave or close. Then the treasury receives less revenue from business taxes, sales taxes and related sources. That’s exactly what’s happening in L.A. And the city government just made it worse. Write Susan@SusanShelley.com and follow her on X @Susan_Shelley