§ 10.37 — Legislative Findings

Sec. 10.37. Legislative Findings.

The City awards many contracts to private firms to provide services to the public and to City government. Many lessees or licensees of City property perform services that affect the proprietary interests of City government in that their performance impacts the success of City operations. The City also provides financial assistance and funding to other firms for the purpose of economic development or job growth. The City expends grant funds under programs created by the federal and state governments. These expenditures serve to promote the goals established for the grant programs and for similar goals of the City. The City intends that the policies underlying this article serve to guide the expenditure of such funds to the extent allowed by the laws under which such grant programs are established and ensure that employers that receive City contracts and/or financial assistance pay a living wage to their employees. Underpaying employees fosters high turnover, absenteeism and lackluster performance, and tends to inhibit the quantity and quality of services rendered by those employees to the City and to the public. Conversely, studies show that higher wages lead to increases in worker productivity, improves customer service, and results in a decline in worker turnover. Lowering employee turnover is particularly important at the airport, as it yields savings to the employers and alleviates potential security concerns. Through this article, the City intends to require service contractors to provide a minimum level of compensation which will improve the level of services rendered to and for the City. Further, due to the importance of maintaining a safe and secure airport, the City finds that a higher wage for airport employees is needed to reduce employee turnover and retain a qualified and stable workforce. LAX is a major economic engine in Los Angeles, yet many workers at the airport are struggling to keep a roof over their heads and support their families. The airline industry benefited from significant government support during the COVID-19 pandemic, including more than $45 billion in total payments to the top five domestic airline carriers through the CARES Act’s Payroll Support Program (PSP), along with an additional $5 billion to contractors and subcontractors. The airline industry is now rebounding to near pre-pandemic levels, and the City is investing in the industry’s future growth as Los Angeles prepares to host the 2026 World Cup and the 2028 Olympics. This investment includes major infrastructure and development projects, including a $6 billion expansion at LAX. Meanwhile, the airport workers who keep the tourism industry functioning, safe, and profitable – including janitors and security guards, airplane cabin cleaners, airline catering workers, airline passenger service workers, airport restaurant and retail workers, and others – are facing housing insecurity as Los Angeles grapples with an unprecedented housing and homelessness crisis. While airport workers benefit from this article, the wage rates have not kept up with the rising tide of inflation and cost of living in Los Angeles. Further, according to an April 2022 report presented by the City’s Chief Administrative Office, the health benefits requirement for airport workers has not kept up with the rising costs of family health insurance coverage. As a result, many airport workers and their families, who were among the hardest hit during the pandemic, now lack quality, affordable health insurance. Moreover, data gathered by the Los Angeles Alliance for a New Economy in 2024 demonstrates that airport workers, on average, do not work full time, and that approximately 25% of airport workers work part-time. Accordingly, the health benefits provided to airport workers must be increased to ensure more airport workers receive adequate healthcare benefits. An analysis conducted by Berkeley Economic Advising and Research LLC (“BEAR”) in 2024 revealed that modest adjustments in wage distribution for airport workers can substantially enhance equity for the tourism industry, especially for businesses that have proactively embraced fairer pay and comprehensive benefits. Furthermore, BEAR found that implementing minimum wage and health benefit adjustments for airport workers will provide substantial net benefits for the City of Los Angeles, the County of Los Angeles, and the neighboring areas. Indeed, BEAR found that, by 2028, increases to wages and health care benefits for tourism workers are projected to generate nearly $700 million in additional income for the City of Los Angeles and nearly $1.2 billion regionally, while also creating approximately 6,000 new full-time equivalent jobs in the City of Los Angeles and over 12,000 across the region. The City holds a proprietary interest in the work performed by many employees of City lessees and licensees and by their service contractors, subcontractors, sublessees and sublicensees. The success or failure of City operations may turn on the success or failure of these enterprises, for the City has a genuine stake in how the public perceives the services rendered for them by such businesses. By increasing the wage and health benefits for these employees, the City seeks to improve employee performance towards the success of the City’s operations and airport enterprise. SECTION HISTORY Article and Section Added by Ord. No. 171,547, Eff. 5-5-97. Amended by: In Entirety, Ord. No. 172,336, Eff. 1-14-99; In Entirety, Ord. No. 184,318, Eff. 7-7-16; In Entirety, Ord. No. 185,321, Eff. 1-20-18; In Entirety, Ord. No. 188,610, Eff. 9-8-25.