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Middle-Class Tourism Jobs: Fact Check

 

Image: MisleadingStatement: “Fifty-three percent of tourism employees earn a middle-class salary or higher,” said Joe Terzi, president and CEO of the San Diego Tourism Authority at a Feb. 25 City Council meeting.

Determination: Misleading

Analysis: San Diego tourism leaders are emphasizing their industry’s economic impact as they try to persuade Mayor Bob Filner to allow a previously approved deal to move forward.

They want the mayor to sign an operating agreement that would allow the San Diego Tourism Authority [1] to use a 2 percent charge on hotel bills to advertise the region and support Tourism Authority operations. But as we’ve explained in other posts, Filner isn’t budging [2] and the situation will likely be hashed out in court [3].

Salaries in the tourism industry became a flash point in the debate, particularly when Filner proposed a livable-wage requirement for workers at downtown hotels.

Tourism Authority CEO Joe Terzi shot back, insisting at a recent City Council meeting that more than half of tourism employees earn at least a middle-class salary.

We decided that claim merited more vetting because Filner, as well as advocates and labor leaders, have criticized the salaries at downtown hotels.

The figure Terzi cited came from a national study released late last year.

The U.S. Travel Association [4] analyzed years of survey data from the federal Bureau of Labor Statistics to track the earnings and long-term success of workers in the tourism industry.

Hotel workers aren’t the only tourism workers. The industry also includes entertainers, recreation workers, restaurant servers and more.

David Huether, the association’s senior vice president of research, said about 19 percent of those staffers work in the lodging industry while the majority, roughly 40 percent, works in food service.

Huether, who oversaw the study, determined a middle-class salary could range from $25,854 to $68,920. More than half of travel workers across the nation make at least that amount, he said.

But that’s a national estimate, and it’s more costly to live in San Diego than in many other parts of the country.

Marney Cox, chief economist at SANDAG, was skeptical about how the study’s findings translate in San Diego.

“It’s probably not going to be true in most places in California but it would probably be more true in Louisiana,” said Cox.

Cox suggested a comparable middle-class salary range in San Diego would be closer to $40,000 to $80,000.

Kelly Cunningham, an economist at the National University System Institute for Policy Research, also suggested San Diegans need to make more to be considered middle class.

Some analysts define the middle class as the middle 50 percent of incomes. By that calculation, Cunningham said the average 2011 San Diego County income of about $51,000 means residents who make or live in a household with a total income of $38,000 to $70,000 can be considered middle class.

The average salaries for tourism industry workers in San Diego County don’t fit either metric.

Data from the state’s Employment Development Department [5], which tracks labor trends in the state, shows the average San Diego County travel industry worker brought in a wage that would amount to less than $30,000 annually.

From January to March 2012, the county’s leisure and hospitality workers brought home an average of $430 a week or an estimated $22,360 annually. Wages dropped slightly from April through June to $414 a week.

Hotel workers posted somewhat higher average salaries. State figures show they made an average of $570 a week, or roughly $29,640 annually, in the first three months of 2012. Wages fell to $557 a week from April through June.

Terzi and Kerri Kapich, the Tourism Authority’s top marketing official, pointed to industry-specific factors when presented with those findings. For example, Terzi said, many tourism industry staffers work part time and may attend school or hold another part-time job. They may also collect tips that aren’t reported fully.

“There are a lot of those issues in the industry that affect overall reported numbers in terms of annual income,” Terzi said. “Those are two major things that affect these numbers and tend to have them trend lower than they are.”

National Bureau of Labor Statistics data [6] showed the average leisure and hospitality worker put in an average of 26 hours a week from October 2012 through January 2013. Similar data wasn’t available for San Diego County.

Still, it’s clear that tourism workers in San Diego County need to make more than they would in many other parts of the country to cover their expenses.

A 2010 report [7] by the nonpartisan California Budget Project [8] found that a single adult would need to make about $620 a week to cover housing, food and other bills in San Diego County. A single parent would need to make $1,278 a week to support a household, according to the report.

The average wage for San Diego County tourism workers is less than these weekly salaries.

“It’s not uncommon for hotel workers to get two full-time jobs to be able to live in San Diego,” said Brigitte Browning, president of Unite Here Local 30 [9]. The union represents about 4,500 tourism workers in San Diego County.

Terzi acknowledged San Diego-specific information would be more useful than national data in discussions about the incomes of San Diego’s tourism workers. He pledged to cite more local figures if they become available.

“We’re not trying to mislead anyone,” Terzi said.

But that’s the effect of citing a national study without clarifying the source of the figures. It leaves a deceptive impression because what constitutes a middle-class wage in many southern or midwestern cities would leave a San Diego family struggling to make ends meet.

For that reason, we’re labeling Terzi’s statement “misleading.”

If you disagree with our determination or analysis, please express your thoughts in the comments section of this blog post. Explain your reasoning.

Lisa Halverstadt is a reporter at Voice of San Diego. Know of something she should check out? You can contact her directly at lisa.halverstadt@voiceofsandiego.org [10] or 619.325.0528.

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