Glendale Prop. 499: A Boost to Workers, Modest Challenges for Employers
October 10, 2024Glendale Prop. 499: A Boost to Workers,
Modest Challenges for Employers
Voters in Glendale are voting on Prop. 499 this November. It would increase the minimum wage to $20 an hour for Hotel and Event Center workers within the city’s limits. It requires particular workplace protections for housekeepers that mirror what has been adopted in Los Angeles to prevent employers from compensating for higher wages by increasing room quotas. It also creates a Dept. of Labor Standards within the City of Glendale to enforce its wage and workplace provisions.
This economic analysis estimates the impact of the targeted $20 minimum wage on these specific sectors, which will become $20.60 due to a projected 3% increase on Jan. 1, 2025 to keep pace with inflation. In addition, the Grand Canyon Institute’s (GCI) analysis demonstrates the immensely exaggerated negative impact estimates of the Common Sense Institute (CSI) which are inconsistent with past research on the impacts of minimum wage increases. GCI also finds that another analysis done for the City of Glendale by Applied Economics significantly overstates cost impacts on hotels due to flaws in its methodology that leads to estimates of lost hotel occupancy being off by more than a factor of four.
Findings
- While some modest negative employment impacts in the Hotel and Event Center sectors may occur, Prop. 499 will boost impacted worker pay by an estimated 22% overall.
- Impacted workers who live or spend time in Glendale, will have more disposable income to benefit the city’s economy.
- Upward pressure on prices at concessions at major Event Centers like Desert Diamond Arena and State Farm Stadium will likely be about 6%.
- Hotels will experience a slightly higher cost increase of an estimated 9%, which if passed on to consumers as a higher room rate may lead to declines in occupancy of almost 4%.
- The impact on future hotel development is likely more tied to how successful amusement parks like Mattel Adventure Park are than Prop. 499.
- Overall, sales tax revenues increase modestly under Prop. 499, though expenses increase by $1 million to cover the Dept. of Labor Standards agency required by Prop. 499.
About
Dave Wells holds a Ph.D. in Political Economy and Public Policy and is the Research Director of the Grand Canyon Institute. He can be reached at dwells@azgci.org or (602) 595-1025 ext. 2.
The Grand Canyon Institute (GCI) is a nonpartisan, nonprofit organization dedicated to informing and improving public policy in Arizona through evidence-based, independent, objective, nonpartisan research. GCI makes a good-faith effort to ensure that findings are reliable, accurate, and based on reputable sources. While publications reflect the view of the institute, they may not reflect the view of individual members of the Board.
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