‘none Of This Is Good For The City’: The Business-labor Battle That Could Derail The 2028 Olympics

LOS ANGELES — Many of Los Angeles’s leaders had hoped to spend 2025 preparing the city to host the next summer Olympics and instead found themselves engulfed by a series of unanticipated crises, from devastating wildfires to a destabilizing immigration crackdown. But rather than working together, the city’s leading pressure groups are at each other’s throats in a spiraling grudge match.

After Mayor Karen Bass enacted a new minimum wage that would guarantee tourism workers $30 per hour in time for the 2028 games, airline and hotel companies began working to repeal the law via referendum. A labor union that had lobbied for the wage bill immediately retaliated with four ballot initiatives targeting the travel industry, including to require voter approval for new stadiums and meeting centers. Local chamber of commerce heads then countered with an initiative that would slash the gross-receipts tax paid by city-based companies.

“None of this is good for the city,” said Rick Cole, a former LA deputy mayor who now serves on the city council in neighboring Pasadena. “Not that there aren't legitimate arguments for and against the Olympic wage, not that there aren’t legitimate arguments for and against the gross-receipts tax — but going to the ballot box represents a divisive, confrontational approach that will divert attention from working on common problems.”

Bass’ office has quietly discussed a potential deescalation with representatives of the business-side measures, according to three sources familiar with the meetings. That outreach represents an attempt by the first-term mayor to avoid a quagmire that threatens to devour political attention and corporate money just as she prepares to seek reelection. Already the business-labor feud has distracted local officials from addressing what Cole calls 2025’s “converging crises” as the city faces a $1 billion budget shortfall.

But a truce seems a long way off, in part because the same dysfunction inspired the tit-for-tat makes it unclear Los Angeles has any political leader — including Bass — with the power or stature to keep the peace.

“This moment shows us how broken our policymaking process has become,” said Katy Yaroslavsky, a Democratic member of the LA city council. “When we have two of the most powerful political forces in our city feeling like their only option is to go to war at the ballot box, that's not a sign that things are working as they should.”

Waging war over the ‘Olympic wage’

Los Angeles’s new minimum-pay law for tourism workers has been billed an “Olympic wage,” gradually rising from the current $21 per hour to a nationwide-high of $30 by the time the torch is lit in 2028. But the proposal has its origins in a less heroic occasion. When service unions started working on the proposal, in 2023, the city was pulling itself out of a post-pandemic tourism slump. The city’s progressive politicians were receptive, eager to address affordability concerns that contribute to widespread homelessness on the city’s streets.

“It's extremely difficult for someone to live here that's making $17, 18, 19 an hour,” said Anton Farmby, vice president of SEIU-USWW, which represents airport workers. “Many of our members did not want to be in a position to be playing a major role in the infrastructure of making these huge events [like the Olympics] work … but also get left behind.”

But for the airline and hospitality employers who bear the cost of those wage increases, the law represented an existential threat to businesses now struggling with a decline in foreign visitors triggered by the Trump administration’s trade war and border policies. A warning from hotels that the new wage policies would eventually lead to layoffs did not deter the city council, which in late May approved the law by a 12-3 margin.

“The business community worked for nearly two years on this particular issue, trying to educate the city council members, their staff, their business and their legislative liaisons on the impacts of what the order was seeking to do versus what the actual impact would be,” said Greg Plummer, who owns a 250-employee concession company at Los Angeles International Airport. “A lot of those messages fell on deaf ears.”

Within days, the LA Alliance for Tourism, Jobs and Progress — whose $3 million budget comes primarily from Delta Airlines, United Airlines and the American Hotel & Lodging Association — filed paperwork to put a citizen’s-veto referendum before voters in 2026. (Plummer is among the small businesspeople listed as the measure’s official proponents.) It would take 92,000 signatures to reach the ballot, but just filing the referendum had an immediate impact: delaying implementation of the law’s first planned pay increase on July 1, to $22.50 per hour.

Frustrated by the possibility that years of lobbying could be wiped away with a corporate-backed campaign, organized labor launched a counteroffensive. In June, Unite Here Local 11 — which represents 32,000 workers across Southern California hotels, airports and sports arenas — filed a package of four ballot initiatives. They varied in subject matter, but reflected a view within Unite Here’s leadership that local corporations required further checks on their power than the city council was ready to provide.

All the initiatives targeted the bottom line of the companies funding the referendum. One would penalize corporations whose CEOs earn more than 100 times what they pay their median employee in the city. The proposal to require public approval for “event centers” would also apply to hotel expansions. Another would create a $30 minimum wage for all workers across sectors.

“There's an assumption that somehow business does things better, and that somehow we should allow them to run our city,” said Kurt Petersen, co-president of Unite Here Local 11. “And I think the Olympics are kind of a significant example of that abdication of responsibility, frankly, by city leaders.”

At the same time, service unions sought to hinder the industry-led effort to qualify the minimum-wage referendum, drawing attention to what they said were deceptive tactics used by petition-carriers. (The referendum campaign denies this.) As the tourism alliance campaign submitted 140,000 signatures in late June, Unite Here’s members filed more than 100,000 requests to revoke their signatures, despite the fact that many of them had never signed the referendum petition in the first place. The two sides effectively buried the city clerk’s office in summertime paperwork, forcing workers there to do an arduous manual check of every signature in a process expected to drag into September.

By July, business leaders had had enough. A group organized through area chambers of commerce filed an initiative to repeal the city’s gross-receipts tax, a levy Los Angeles businesses pay on overall revenues that brings in nearly $750 million annually. The initiative represented an all-out declaration of war, not just against the unions but a city budget whose billion-dollar deficit prompted an official “fiscal emergency” declaration this summer.

Stuart Waldman, the president of the Valley Industry and Commerce Association based in the San Fernando Valley, recalled that elected officials used to mediate such disputes between business and labor interests to find a mutually acceptable compromise.

“That just doesn't happen anymore, and that’s unfortunate,” said Waldman, one of the tax initiative’s official proponents. “So now, we’ve decided that we've got to go a different route — and that route is going on the offensive.”

A breakdown in governance

Business and labor have been at odds for a long time in Los Angeles, where in 1910 two officials of an ironworkers union planted bombs at the Los Angeles Times headquarters to protest its right-to-work editorials. (Twenty-one people died at the newspaper’s downtown headquarters.)

Now the disagreements are less violent but more wide-ranging, covering everything from which railcars the city’s transit agency uses to the development of downtown’s Bunker Hill neighborhood.

Such disputes were typically refereed by elected officials who forced business and labor into a combative-but-collaborative relationship. When Mayor Eric Garcetti signed a trend-setting $15 per hour minimum wage law in 2015, labor unions hailed it as a major victory. But Garcetti worked with city council to build in concessions for the business community, spreading out implementation of the wage increases over a longer time period than originally proposed with an even slower timeline for companies with 25 or fewer employees.

But such balancing has grown harder as organized labor increased its clout at city hall. As Southern California’s economy shifted away from the once-dominant manufacturing and freight industries towards greater reliance on tourism and major events, service unions — whose memberships skew Latino and female — have come to dominate the labor landscape. Unite Here Local 11 grew into a regional behemoth as it gobbled up smaller labor unions across southern California and Arizona.

Earlier in Bass’ term, the union launched what was described as the hotel industry’s largest-ever strike and qualified an initiative that would have required hotels to rent vacant rooms to homeless people. (The union agreed to pull that measure from the March 2024 ballot after the city council passed tougher restrictions on new hotel development projects.)

“There’s long been a symbiotic relationship with labor, because without jobs, labor’s workers have nothing to do,” said Waldman, whose Valley Industry & Commerce Association represents San Fernando Valley businesses both within and beyond the city limits. “It’s been in the past 20 years that labor has gotten much more aggressive.”

The union’s preferred candidates have ousted more moderate members of city council, shifting the body’s priorities to the left not just around workforce economics but issues like housing and criminal justice.

“The policies look very different, and yes, the system which is used to the status quo and winning is losing power,” said Hugo Soto-Martinez, a former Unite Here organizer who beat a two-term incumbent in 2022.

Bass, a longtime state and federal lawmaker who was elected in 2022 on promises to be a “locking arms” coalition-builder, has done little to build consensus between business and labor. She signed the minimum-wage bill into law, and a prominent member of her administration warned last week that forcing voter approval on large event centers might jeopardize use of five planned Olympic venues. But she has remained largely mum about the intensifying conflict since.

“Labor has the inside track now, and … business feels like they really don't have much clout at City Hall,” said Cole, the former deputy mayor. “And so this is now playing out publicly.”

That has left both business and labor looking to California’s distinctive brand of direct democracy — which allows any interest with the cash or intent to bypass the city’s elected leadership and put its concerns directly before voters — as their best tool to settle scores. Six measures are hurtling towards the city’s 2026 ballot, Unite Here seems unlikely to back down any time soon.

“We don't have time to spare — the Olympic and Paralympic Games are in fewer than three years,” said Yaroslavsky, a city council member who has spoken with both sides to explore a willingness to negotiate. “And if we're distracted by a big food fight on the June or November ballot … it will mean that really important stuff doesn't get the attention that it needs.”

The powerless broker

Shortly after business groups filed their gross-receipts tax repeal in July, Bass’ office made its first outreach to some of the figures involved in the campaign. But it wasn’t until the end of the month that Bass’ team began to actively discourage the gross-receipts tax repeal she calls “a blow to the city’s general fund” that would “result in cuts to public safety and city services.”

“Ironically these cuts would impact several specific areas that impact businesses throughout the city,” she said in a statement that her office provided to POLITICO this weekend. “We must continue to do everything we can to help businesses throughout Los Angeles — this is the opposite.”

Yet Bass has not put similar pressure on Unite Here Local 11, which endorsed her candidacy in 2022, to pull back from the ballot. (Representatives for Unite Here Local 11 and SEIU-USWW did not respond to a request for comment about their involvement in potential talks.)

At least some of the measures could share 2026 ballots with Bass, who is up for reelection next year (although no challenger has yet to emerge). If any were to pass, they could have massive ramifications for the city’s budget, tax structure, workforce and economic-development agenda in her second term.

“I would be surprised as if she wasn't actively trying to negotiate some middle ground on many of those initiatives that might happen,” said former California Gov. Gray Davis, who represented a Los Angeles district in the assembly before winning statewide office. “She's the mayor, and obviously the Olympics are in her city and she wants this to be a great moment for the city and for America and for the world.”

But it remains unclear how Bass could negotiate anything more than a temporary ceasefire between the sides. A permanent détente now seems impossible among combatants who feel they are more likely to get their way by working outside City Hall than within it.

“The initiative process, from our perspective, is one of the few tools that working people like cooks and servers and room attendants have at their disposal,” said Peterson, the Unite Here Local 11 co-president. “Our members would rather knock on doors and talk to their neighbors and get signatures than go to the city council for hours on end and not have the council respond to them the way they should have.”