The Hot Labor Summer
Author: Greg Valliere
July 7, 2023
BUT HERE’S ANOTHER HOT SPOT — in southern California, where workers have strong political support for their argument that surging housing costs warrant significant salary increases.
UNION LEADERS IN THE REGION have labeled this as the “hot labor summer,” as workers strike at hotels — in tony locations like Laguna Beach and Beverly Hills. Some of the workers returned to work earlier this week, but said they would continue to picket and strike “in waves” at the hotels.
THIS CONTINUES A PATTERN OF MILITANCE on the part of school employees, Hollywood writers, and others — even employees at Dodger Stadium, who recently won a major new wage hike. These workers say they they can barely pay their rent, as costs of gasoline, groceries and other basics have not kept pace with their pay in this high-tax state.
SO THEY HAVE STRUCK AT HOTELS as the summer high season begins. The union covering most housekeepers wants wages, now $20 to $25 per hour, to immediately rise by $5, followed by a $3 increase in each subsequent year of a three-year contract. A settlement in that range undoubtedly would prompt hotels to raise their rates significantly.
OUR BOTTOM LINE ON LABOR UNREST is that there are two likely scenarios. First, a generous resolution would encourage other workers to make similar demands, an inflationary threat. Or second, strikes — especially at UPS — could eventually become a headwind for supply chains as the holiday season approaches.
NEITHER SCENARIO WOULD BE WELCOME at the Federal Reserve, which has not been able to extinguish inflation, and faces a likely economic slowdown as surging interest rates lead to a softer economy in the second half.
AND NEITHER OPTION WOULD BE WELCOME by the Biden Administration, which is rolling out a new argument — “Bidenomics” has produced a red-hot economy. That has not been persuasive with voters, who say they cannot keep pace with with high prices without pay increases.
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