Friday, September 18, 2009

This is how the U.S. economy will recover, through healthy wage gains for labor:

Or maybe not:
When the housekeepers at the three Hyatt hotels in the Boston area were asked to train some new workers, they said they were told the trainees would be filling in during vacations.

On Aug. 31, staffers learned the full story: None of them would be making the beds and cleaning the showers any longer. All of them were losing their jobs. The trainees, it turns out, were employees of a Georgia company, Hospitality Staffing Solutions, who were replacing them that day.

The move to outsource the jobs of about 100 housekeeping employees at the Hyatt Regency Boston, Hyatt Regency Cambridge, and Hyatt Harborside at Logan International Airport is unusual in the hospitality industry, which counts on the housekeeping staff to help make sure hotel guests are comfortable.

“It’s unbelievable,’’ said Lucine Williams, 41, who has worked at the Hyatt Regency Boston for nearly 22 years and was making $15.32 an hour plus health, dental, and 401(k) benefits when she lost her job. “I don’t know how they can treat people like that.’’

After hearing the news at meetings last month, employees cried and screamed, said Drupattie Jungra, 55, who had worked at the Cambridge Hyatt for more than 21 years and made $15.69 an hour, plus benefits. (...)

[The president of Unite Here Local 26, a union that represents local hotel workers] said the new workers will make $8 an hour and receive no benefits, based on information from a Hospitality Staffing Solutions employee. Staffing firm president Rick Holliday sent out an e-mail stating his employees made competitive wages but didn’t answer further questions.
Those jobs paid $32K (plus benefits). The new workers will make about $16K a year. Who can live on that?

Also, as to the claim by Holliday that the employees at Hospitality Staffing Solutions are making "competitive wages", $8/hour is minimum wage in Massachusetts.

This is part of the grind-down of wages and benefits that is going to make an economic recovery difficult.

UPDATE: There were protests about this action.


Was this done to increase profits to the hotel, or to keep the hotel from closing because it isn't making any money in this economy?

Would it have been better for the hotel to shut down?

By Anonymous Anonymous, at 9/18/2009 6:24 AM  

Maybe the hotel wouldn't have to consider a shutdown if consumers were filling up the hotel because they were paid high enough wages to be able to afford the hotel. Lower wages mean less hotel guests. How does that help anyone?

By Anonymous IQ49, at 9/18/2009 6:47 PM  

Maybe the hotel wouldn't have to consider a shutdown if aliens from Neptune booked a convention.

The hotel doesn't have any control over the wages of its guests.

Less hotel guests is better than a closed hotel. Assuming that "lower wages mean less hotel guests" -- an unsupported and surprising assertation for which you offer no evidence. When I go to a hotel I have no idea what the staff is paid, so why is this the case?

By Anonymous Anonymous, at 9/18/2009 7:16 PM  



By Blogger Shag from Brookline, at 9/19/2009 3:30 AM  

Answer the question anonymous. How does depressing wages overall help the economy?

By Anonymous IQ49, at 9/19/2009 8:18 AM  

Of course depressing wages doesn't help the economy. When a business is losing money, cutting wages is not an arbitrary choice.

According to the article, Hyatt revenues in its Boston hotels had a 20% drop in per-room revenue in June, a 10% drop in July, and an overall corporate revenue drop of 18% since the business-toxic Obama administration took over.

If the hotel is unable to balance its books, it will close. Then all of the employees, not just the housekeeping staff, will lose their jobs. If that happens, all of the surrounding ancillary businesses -- the restaurants, bars, drug stores, dry cleaning services, tourist attractions -- are likely to be wiped out as well.

How long do you think that the Hyatt corporation can run at a deficit, paying out more in salary than it is taking in? Are you so used to endless government deficit spending that you don't understand that what Obama is doing is impossible in the private sector?

The answer to your question is that they are helping the economy by not going out of business and leaving enormous boarded-up buildings or post demolition vacant lots all over Boston. They are helping the economy by fighting to prevent Boston from turning into another Detroit.

Those wages can always be brought up if the economy improves and the labor market tightens up. If those hotels close and are torn down, those wages will never come back.

By Anonymous Anonymous, at 9/19/2009 10:20 AM  

anon, rationalization like that is why our manufacturing base is sitting in china.

how many cuts did management suffer? how many millions in compensation did execs offer to give up before cutting labor?

this move was meant to kill the union.

By Anonymous goputopiameans3rdworldwages, at 9/21/2009 5:20 AM  

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