The Gangs of New York A union scam helps explain why Gotham hotels cost so much.
Tourists converging on New York City for the holidays are often stunned by how expensive the hotels are. Much of that is real estate and seasonal demand, but what may be less apparent to travellers is a shakedown engineered by Big Labor and assorted corporate cronies to force non-union accommodations to organize or leave Gotham.
In 2001 the major city hotels bought labor peace through a multi-employer collective-bargaining agreement known as the Industry Wide Agreement, or IWA. The New York Hotel Trades Council (AFL-CIO) and the Hotel Association of New York City, the trade group for the five boroughs, agreed that association members would be neutral when the union tries to organize a property and abide by “card check.” That’s the gambit that denies workers their right to secret ballots in labor elections.
Businesses tend to get the unions they deserve, and three of every four New York hotel employees now belong to a workplace with contracts governed by the IWA. More notable is that the agreement contains an unusual “accretion clause” that foists the IWA’s terms on every hotel that is directly or indirectly owned or managed by any party to the IWA.
Hotel owners in New York often engage third-party managers to run the business or as contractors to provide discrete services such as guest amenities or back-office due diligence. Under the accretion clause, a non-union hotel that hires one of these agents becomes a “joint employer” that must obey the IWA even if its proprietors never consented to the agreement, bargained with the AFL-CIO or joined the Hotel Association.