Tourism Boom Pays Off For N.Y. Hotel Union

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When the New York Hotel Trades Council ratified a new contract for hotel workers last month, much of the media coverage focused on "panic buttons." Coming after the sexual assault allegations against former International Monetary Fund chief Dominique Strauss-Kahn, the idea of housekeepers wearing a badge that could call for help was all over the news.

But the real labor story is the long-term contract the hotel workers union and the industry negotiated. The agreement is unusual at a time when many unions nationwide are fighting for survival.

Generous Terms

The new contract goes into effect in July, and gives workers a 29 percent raise over seven years. It also guarantees full medical, dental and optical benefits to 30,000 maids, dishwashers and other hotel employees.

Peter Ward, president of the New York Hotel Trades Council, says the contract "provides long-term economic stability to hotel workers in New York City."

The agreement has its critics. Fox News business reporter Sandra Smith critiqued the contract on air last month.

"A 29 percent increase. This is a long-term contract — a seven-year contract. Not just medical, dental, optical, [but also] no out-of-pocket expenses," Smith told anchor Stuart Varney. "This is a nightmare ... for everyone that has to foot the bill, now that the union demanded this kind of pay for hotel maids."

Under the terms of the agreement, hotel employees will receive about $60,000 per year by the end of the seven-year contract.

But the New York Hotel Trades Council, along with the Hotel Association of New York City, which represents more than 260 New York City hotels, have been providing health benefits to workers for decades. They operate four of their own clinics, complete with doctors and pharmacies.

Ward argues that by working closely with management, the two groups have been able to provide broad services to 80,000 workers, dependents and retirees — all "for about 35 percent less than the open market," he says.

"They are not-for-profits," Ward says of the health care services. "There are no corporate jets. There is no corporate advertising. And a lot of credit really belongs to management."

Ward says the union and management worked hard to project costs over the next seven years, and were able to use the projected savings for the wages and pension increases.

At a time when labor negotiations often involve drawn out and sometimes bitter fights, the hotel workers' new contract was agreed upon early — five months before the current contract expires.

Both sides have described the contract as a win-win, including Lisa Linden, a spokesperson for the Hotel Association of New York City. "We are delighted that, in a cooperative and constructive spirit, we were able to reach this early agreement," she says. "It's good for the hotels, for the union and for the city of New York."

A Boost From Tourism

But there's a deeper reason that a contract like this was possible. More than 50 million tourists came to New York City last year — a record number. Hotel rooms were above 80 percent occupancy, with the average room rate close to $300 a night. Hotel gross revenues were roughly double that of any other U.S. city.

It's possible that the generous contract is an outlier, made possible by New York's strong tourism sector. But Harley Shaiken, a University of California, Berkeley professor who specializes in labor issues, says this agreement harkens back to the era 50 years ago, when labor unions were much stronger.

At that time, Shaiken says, workers had an easy path to the middle class and "were regularly able to deliver these kinds of gains for their members."

Shaiken says while the salaries may seem high to critics, the money workers earn will ultimately go back to the city. "They're spending much of that $60,000 a year in the New York economy," he says.

As for the panic buttons, they were originally introduced as legislation by New York Assemblyman Rory Lancman, who noticed that his office had them.

"I have never had to use the button, fortunately," he says. "Being a member of the Assembly is not nearly as dangerous as being a hotel worker."

Several New York hotels have already put such systems in place. Under this contract, the personal alarms will be in all hotels within a year. But union officials say that, of the 40 issues in the contract, panic buttons are about No. 38 on their priority list.