Our view: Big pay increase right goal for casino union
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This is a good time for union casino workers to be negotiating for a new multi-year contract. Their case for needing higher pay and for the ability of Atlantic City’s nine casinos to provide it hasn’t looked this strong for many years.
Local 54 of the Unite Here union is by far the largest representative of city casino workers, and the region’s largest representative of private sector workers. Its contract with the city’s nine casinos expired on June 1.
With talks ongoing but not much progress, Local 54 immediately began an informational picket (and not interfering with foot traffic) outside Tropicana Atlantic City. The union is seeking its first pacesetting contracts there and at the two other casino hotels in the city owned by Caesars Entertainment, as well as at Borgata Hotel Casino & Spa, owned by MGM Resorts International.
The case for casino employees needing and deserving more money will be familiar to workers everywhere who face costly inflation as they try to recover from the pandemic-restriction economy.
Consumer prices as of May have jumped 8.4% the past year in South Jersey and most of the nation, the highest annual increase in about four decades, according to the federal Bureau of Labor Statistics. Wages are rising strongly too, but at 5.2% not keeping pace with inflation.
That suggests that the starting figure for the first year of a new casino union contract should be something above 5% or 8%. Expect harder bargaining on raises in the following years, since estimates of future inflation vary widely.
Local 54 President Bob McDevitt said the union was focusing on pay rather than benefits this time because “the workers have not had a cost-of-living raise in a while.” Without the automatic cost of living increases common to government worker contracts, Unite Here members may be hard pressed to keep up regardless of the pay increase they get.
Another union bargaining advantage is that the labor market is extraordinarily tight and many businesses have struggled to find workers, with a U.S. jobless rate of just 3.6% in May. Unemployment is higher in Atlantic County, a seasonally adjusted 5.8% in April, according to the Federal Reserve Bank of Philadelphia.
The argument over how much more Atlantic City casinos can afford to pay their employees is much like that over whether they needed the significant tax breaks in the state’s revision this year of their PILOT payments. Overall revenue is much higher, thanks to new and surging sports and online betting. Casino workers are far more essential to in-person gambling, and operating profits from that have now exceeded their pre-pandemic level citywide, although not at all casinos in town. But there’s no question the casino industry is doing better than it has in years.
Union officials and members said they’ll picket and demonstrate until they reach a contract. If that’s not enough, a strike is possible. McDevitt said a vote by union members on whether to authorize a strike could be held by the end of this month if needed.
Striking is most effective where the withholding of labor can close a business. Ordinarily city casinos might be able to hire sufficient non-union workers to remain open, but that would be harder if not impossible in this labor market. As of April, the number of leisure and hospitality workers in Atlantic County had rebounded to 44,700, from a low of 10,000 in May 2020 when Gov. Phil Murphy ordered casinos to shut. Last year employment in the sector stayed in the mid-30,000s.
We hope the industry and its workforce reach a contract that allows both to succeed. That would be best for the regional economy anchored by the casino industry. May they arrive at such a compromise without difficulty and adverse publicity as South Jersey heads into its crucial summer season.
