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It’s Past Time for the City’s Thriving Tourism Industry to Pay Living Wages

A NEW ORLEANS TRIBUNE EDITORIAL: 

Chamber maid working in hotel bedroom.

For workers in several states across the nation, the New Year brought so much more than soon-abandoned resolutions and hangovers. For some, it brought rising wages. 

Workers in Arizona now earn $11 an hour, which will jump again to $12 next year. While the statewide minimum wage in New York State climbed slightly from $10.40 to $11.10,  businesses with 11 or more employees in New York City had to start paying $15 an hour on or before Dec. 31, 2018; and those with 10 or fewer workers will have to pay $15 by the last day of 2019.

The minimum wages in Massachusetts, Washington and California all rose to $12 an hour—currently the highest of any state. And minimum-wage workers in San Diego are set to earn even more. They are starting at the state’s new $12 minimum, but their pay will rise by one dollar every year for the next three years—capping at $15.

Meanwhile, minimum-wage earners in the District of Columbia will earn $14 an hour beginning July 1.

Of course, not all of the pay hikes are quite as significant.

In Florida, the state minimum wage went up 21 cents an hour from $8.25 to $8.46. Minimum-wage workers in Ohio now earn $8.55 an hour. Workers in Minnesota earning minimum wage will now make $9.86 an hour. And while that number, which equates to about $20,508 annually before taxes for a 40-hour work week, still leaves many employees teetering dangerously close to the poverty line, it is a full $2.61 an hour more than the federal minimum of $7.25. 

Yes, the federal minimum wage is still $7.25; and it is what minimum wage workers in the great state of Louisiana still earn in 2019. Of course, our state is not alone. There are 22 states where there is either no minimum wage or where the state’s minimum wage is set at $7.25 or less.

We’re not in good company. Among the states where minimum wage is still $7.25 or less are Tennessee, North Carolina, Mississippi, Kentucky, Georgia, Alabama, Wyoming, Nevada, Kansas, Oklahoma, Idaho, Virginia, Utah, Texas, South Carolina, Pennsylvania, New Hampshire, Iowa, Indiana, Wisconsin, and North Dakota. There are another 18 states where minimum wage is between $7.50 to under $11 an hour—as little as $15,600 a year in New Mexico to $10.78 an hour or $22,422 a year in Vermont.

According to the U.S. Bureau of Labor Statistics, in 2017, about 40,000 Louisianans employed at an hourly wage earned $7.25 or less.

That is simply not enough to live on—not even in Louisiana. According to MIT’s state-by-state living wage calculation, a single adult in Louisiana needs to earn at least $10.91 an hour, about $22,700 a year, in order to provide the necessities and comforts essential to an acceptable standard of living. Add just one child to that mix and the number jumps to $23.43 an hour or $44,734 annually.

Last year, a study by the National Low Income Housing Coalition and Greater New Orleans Fair Housing Action Center concluded that in order to comfortably afford a two-bedroom apartment in New Orleans, an hourly worker needs to earn $18.54 an hour or $38,563 a year.

Whether the magic number to live comfortably, provide for a family and not be housing-burdened or food-burdened or health-insurance burdened or just plain ole burdened in Louisiana is $23.43 or $18.54, the fact is that 40,000 Louisianans aren’t anywhere near it. And there are hundreds of thousands more who, while they are earning more than $7.25 an hour, are still not earning enough to provide the basic necessities of a comfortable life. Many of them are single, female heads of households, responsible for not only their own wellbeing, but that of one or more minor children, which certainly helps explain why Louisiana has one of the highest rates of children living in poverty in the nation.

We’re not talking the lap of luxury. We’re talking about people being able to afford housing, clothes, childcare, health care, transportation and taxes without stressing or worrying about the next meal or bill. We’re talking bare minimums, and minimum wage is not enough.

It is time for the state of Louisiana and the city of New Orleans to step up.

The Data is Clear: The Tourism Industry Must Lead the Way

The Data Center in New Orleans released a report in December 2018 that took a look at the local tourism economy and what it really means for the tens of thousands of New Orleanians who work in local hotels and restaurants.

Of course, jobs in the tourism industry are not the only ones available in New Orleans, but tourism is the city’s major economic driver, which makes tourism jobs an important factor in the city’s economy. According to the Data Center, 26,451 jobs out of 207,863 total jobs offered in New Orleans in 2017 were in the hotel and full-service restaurant industries combined. In other words, nearly 13 percent of jobs in New Orleans were clustered in these two major segments of the tourism industry. And that number does not include employees in other tourism-related businesses such as travel agencies, museums, amusement and recreation venues.

While the report states that the hotel industry offers some “relatively high-paying jobs”, most of the industry’s workforce is “skewed toward lower-wage occupations.” For instance, it notes that thousands of maids and housekeeping workers earn a median wage of $10.60 an hour.  The $10.60 figure is just a median. We know there are hotel workers, especially housekeepers, earning far less than that. We have talked to them and listened to them share how they are considering quitting one hotel for another because they can earn $8.50 an hour at the prospective job and that $8.50 is more than they are currently earning. 

The report goes further to state that many of the low-wage jobs in the industry are disproportionately filled by Black and Hispanic workers and women.

In fact, according to the Data Center analysis, tourism jobs in New Orleans are least likely to be “good jobs”—the kind that pay living wages or provide a path to jobs that do.

That’s disconcerting to hear in a city where tourism is the major economic engine.

As the Data Center report, titled “Benchmarking New Orleans’ Tourism Economy: Hotel and Full-Service Restaurant Jobs” also notes, the low-wage tourism jobs that dominate the industry must be examined within the context of New Orleans’ cost of living.

Recall the MIT living wage calculation noted in the top of this editorial. When the costs of housing, food, childcare, transportation and healthcare are determined, workers in Louisiana need to earn at least $23.43 to comfortably take care of themselves and one dependent. That is not the case for the vast majority of workers in New Orleans’ hotel industry. As we have pointed out in previous editorials of our paper, leaders in this same industry fight against raising minimum wage. They are the same ones that have even waged a campaign against local homeowners who have been able to profit from the tourism industry through the short-term vacation rental market. And the same ones that have the nerve to ask for corporate welfare to build more high-priced luxury hotel developments, where maids will earn a median wage of $10.60 an hour—if they are lucky.

Meanwhile, 57 percent of New Orleans’ tourism-industry workers that are renters are housing-cost burdened compared to 43 percent of workers in all other industries. As defined by the federal government, housing-cost burden occurs when a household has to spend more than 30 percent of their pre-tax income on housing. It is clear to us that despite the narrative the greedy hoteliers are attempting to paint  the problem with  affordable housing in New Orleans lies more with stagnate wages than with the  short-term rental industry.

The situation isn’t much better in the city’s full-service restaurant industry in which nearly 15,000 people work, but very few are first-line supervisors and managers earning more than $15 a hour. Instead, the vast majority—about 93 percent—are cooks, wait staff, food prep workers and dishwashers earning median salaries that range between $9.57 an hour to $11.23—still a far cry from the more than $23 needed to take care of one adult and one child.

Tourism Industry Can’t Focus on Promoting New Orleans without Uplifting New Orleanians

Now we might be less inclined to complain about the low wages being earned by the vast majority of tourism industry workers in New Orleans if the industry was not growing. But it is. Wages are the only things that have remained stagnate. Meanwhile, leaders in the tourism industry boast of record-breaking years with regard to the amount of dollars spent and the number of people that visit.

In 2017, New Orleans experienced a 6.02 percent increase in direct visitor spending that contributed $8.7 billion to the economy. And the number of visitors increased by 5.7 percent, according to data compiled for and shared annually by local tourism industry leaders.

According to that same data, that six percent increase in 2017 tourism revenue when compared to 2016 was in five spending categories that included: Entertainment and Recreation; Food and Beverage; Shopping; Transportation; and Lodging. In fact the largest increase was in lodging, which rose by 13.3 percent. The second largest increase of 8.3 percent was in food and beverage.

And we are happy to see it. Don’t think for one second that we are opposed to the local tourism industry. We recognize its value to the economy, but we are also deeply troubled that the two tourism-related areas that experienced the highest revenue jumps in 2017 continue to keep most of their workers employed at what can only be described as poverty wages in a place where two bedroom apartments cost $1500 a month.

If tourism is the economic engine that drives New Orleans, the people who toil in the industry every day—making beds, carrying bags, bussing tables, serving and cooking meals in restaurants—are surely the fuel that moves the engine.

What’s more is that many of those same people are the heart of New Orleans and the culture promoted by the tourism industry. And it’s time that their paychecks accurately reflect their worth.

According to the data compiled for the local tourism industry, 17.74 million people visited New Orleans last year. 

Now just ask yourself, with whom did those 17,740,000 million plus people interact most on their trips to our great city? Exactly who was it that made their stays in New Orleans memorable and magical? 

The hotel industry’s computer information systems managers, who are earning a median hourly wage of $52.64? Nope.

The financial managers pulling in a median hourly pay of just under $50? We doubt it.

Of course, we are not suggesting that these professionals do not deserve their earnings. We are saying that those bartenders and wait staff, those maids and janitors and front desk clerks, deserve more than many of them are getting. 

They deserve a living wage.

And this is not just a local tourism industry problem.

Employers across our city must do better.

Employers across our state must do better.

And it would be nice if the state legislature could put in some work as well in an effort to uplift our state and its residents.

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