Equity Harvesting for Profit and Good Wages

Hotels offer an intriguing paradox to the urban planner. They are a foundation of the highly promoted and cherished tourism sector. They accommodate visitors coming to a community to spend money – most of whom require little in the way of public services. And they generate significant tax revenues for local and state governments. Yet, as a group, workers in these vessels of capitalism earn some of the lowest wages of any sector, requiring these workers to seek federal aid and other services for subsistence. This paper looks at the hotel paradox and considers two important questions about these valuable assets; 1) are the low-wage hotel workers that operate and maintain these economic engines a negative externality, or, despite their sub-living wages, is their labor a positive input into the local economy, and 2) what is the capacity of hotel operations to increase wages to a living standard?

The paper (link below) is organized along these two lines of inquiry. The first section analyzes the inner-workings of a hotel property, evaluates the impact of tourism on counties and cities in the Commonwealth of Virginia, reviews the literature on sustainable economies and externalities, and concludes that labor of low-wage hotel workers, albeit undervalued, is a significant positive input into local economies. The second section considers the remarkable flexibility and resiliency of the hotels – from the venerable roadside walk-up, to the modern business-class property – and concludes that the unique qualities of this asset class provide local officials with a significant opportunity to advocate, bargain, and if necessary legislate, living wages for all hotel workers. The paper concludes with a suggestion to explore the nature of all buildings, and the capacity of each to accommodate local living wage initiatives.

You can read the paper here. This is a working paper I wrote during my PhD studies. It is not ready to be cited.