I-1433 will increase the minimum wage, but job seekers deserve a better law.

(July 6, 2016) Washington employers of all sizes and from a cross-section of industries voiced concern today that although raising the minimum wage through Initiative 1433 sounds good, the unintended consequences could be harmful, particularly for first-time job seekers.

Business groups, including the Association of Washington Business (AWB), Washington Restaurant Association, Washington Lodging Association, Washington Farm Bureau, Association of General Contractors (AGC), Washington Bankers Association, and the Washington Affordable Housing Council oppose the initiative, but also believe that a thoughtful middle ground to increase the minimum wage could have been found in the Legislature.

If passed, Initiative 1433 (I-1433) would begin raising the statewide minimum wage to $13.50 per hour by 2020. The first jump from the current $9.47 to $11 an hour would go into effect on January 1, 2017, less than two months after the November election.

The organizations met with lawmakers, business associations and union representatives to find a legislative solution this year, calling for a compromise during the legislative session. But, opposition within the Legislature created the vacuum that has led to the blunt instrument that is I-1433.

“We want to create opportunities for everyone to succeed without jeopardizing job retention and growth, particularly in rural communities,” said AWB President Kris Johnson. “For us, that means support for entry-level jobs and recognition of other compensation that employers already provide like healthcare, retirement and scholarships. Business owners want to see their employees succeed and care about giving people the opportunities that were once given them.”

The Washington Restaurant Association and the Washington Lodging Association, an advocate for raising the minimum wage in a responsible way, also oppose I-1433.

“We went to the Legislature and also submitted our own initiative because we believe the voters deserve more than one option on the ballot. However, in this polarizing election year, there wasn’t support for a moderate voice in either of those venues,” said Anthony Anton, president and CEO of the Washington Restaurant Association and Washington Lodging Association. “I-1433 could have been more drastic and proposed $15 overnight, and many hospitality businesses wouldn’t have made it in that case. But, we still believe our state can do better.”

Anton added that Washington hospitality based businesses report that reducing staff, or cutting staff hours, will likely be an unintended consequence of higher labor costs, followed closely by an increase in menu prices, which could price restaurants and hotels out of businesses and the jobs that they support.

“A law to increase the minimum wage without providing support for starting jobs, or those that get young adults their first work experience will hit farming operations, particularly smaller ones, and their employees hard,” said John Stuhlmiller, chief executive officer for the Washington Farm Bureau. “Agriculture is one of the largest economic drivers in the state and the top job-creation engine in rural parts that need the employment opportunities the most. This initiative puts those job opportunities at risk.”

I-1433 would raise the minimum wage from $9.47 to $11 beginning Jan. 1, and require employers to provide up to 12 days of paid sick-leave. The combined impact of those requirements — instituted at once — would be a costly shock wave to small employers.

“For its part, the employer community has been a reasonable voice in the debate and has tempered union proposals with business solutions with the hope that any minimum wage measure was responsive to both the needs of employers and employees,” said Jerry VanderWood, chief lobbyist for the AGC. “This initiative doesn’t factor in what construction employees ask for, nor does it allow for thoughtful exemptions of parts of the initiative, such as the sick-leave component. A one-size-fits-all approach in the state and across all industries is the wrong approach.”

Service-sector jobs, which will be impacted the most if the initiative passes, are the gateway to employment opportunities, particularly for younger, unskilled workers.

Washington elections return strong results for the hospitality industry.

Revenue optimization, pricing science, reputation management and more at WLA’s Annual Convention, November 15-17 at the Hyatt Regency Bellevue.

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AH&LA says Expedia’s proposed acquisition of Orbitz would create duopoly, restrict consumer choice and harm small, independent hotel owners.

(August 6, 2015) Katherine Lugar, president & CEO of the American Hotel & Lodging Association (AH&LA), released the following statement announcing the association’s opposition to Expedia’s proposed acquisition of online travel booking company Orbitz.

Today, the American Hotel & Lodging Association is announcing its opposition to the proposed acquisition of Orbitz by Expedia. We believe this transaction and the resulting consolidation of the online travel marketplace will result in significant negative consequences, particularly for consumers, but also for the large number of our members who are small business owners and franchised properties.

“With 480 online hotel bookings per minute, the hotel industry welcomes the innovation, convenience and competition that online bookings provide. The hotel industry was among the first industries to encourage consumers to book online. Consumers expect, and hotels offer, a variety of choices and diversity in their online travel selections.

“However, this proposed acquisition would severely reduce consumer choice in the online marketplace. It would result in Expedia, and its numerous associated brands, which would include Orbitz, Travelocity, Hotels.com, Hotwire, Cheap Tickets, and Trivago, controlling nearly 75 percent of the U.S. online travel agency (OTA) business. The loss of Orbitz could be detrimental for many reasons. First, as a search platform and potential distribution partner, it would reduce the number of OTAs willing to work on innovative promotional efforts that benefit consumers. Secondly, hotels currently pay Expedia on average 11% higher commissions than they pay Orbitz. The acquisition could result in Orbitz raising its rates to that level, further driving up distribution costs for hotel operators. Finally, should this acquisition go forward as proposed, it will result in a duopoly with over 95 percent of the online travel agency bookings in the United States being controlled by two competitors, Expedia and Priceline.

“Beyond severely restricting consumer choice, we believe the acquisition could exacerbate the problem of deceptive practices by rogue OTA affiliates posing as direct hotel booking sites. Both companies have affiliate relationships with thousands of smaller websites that offer hotel rooms for booking, some of which have misled consumers who think they are booking directly with a hotel. According to our latest research, there are some 2.5 million misleading bookings a year.

“Deceptive practices harm consumers, who don’t get what they want or expect, suffer the loss of reservations, or face unexpected charges and fees. This concern was raised by the Federal Trade Commission which recently warned consumers about these deceptive practices through two consumer alerts highlighting the scams and offering tips to avoid misleading booking sites. These practices also damage hotel reputations and reduce consumer confidence in the online booking process.

“Finally, this acquisition would result in increased concentration among the OTAs that could adversely affect many independent and small hotel owners who rely on OTAs to reach consumers directly. Indeed, as a result of previous OTA consolidation, as well as this proposed acquisition, the small, economy and mid-scale hotel segments have become increasingly reliant on an ever-shrinking number of OTAs that have the potential to impose steep commissions and demand restrictive contract provisions.

“AH&LA believes the proposed acquisition will accelerate these trends, which are likely to increase distribution costs and ultimately reduce value to consumers. We also believe the combination of Expedia and Orbitz will cause small and independent hotels to pay significantly more to advertise online in the increasingly pay-to-play ecosystem of online search. Taken together, these effects could substantially drive up the cost of doing business for small and independent hotels to the ultimate detriment of consumers.

“We look forward to the results of the Department of Justice’s careful review of this proposed acquisition.”