Atlantic City Union Casino Workers Face Poverty

So much for those low wage casino jobs! Are you watching, Beacon Hill?


He said his current $5.26 hourly wage would be rolled back to $4.50 under the casinos' proposal. In addition, he would have to pay $1.20 per hour toward his health care and 83 cents for pension and severance benefits. In all, he estimates he would lose more than $5,000 in income annually.


Local 54 casino workers union fights prospect of pay cuts in weak economy, more competitive gaming market
By DONALD WITTKOWSKI, Staff Writer pressofAtlanticCity.com

ATLANTIC CITY - Local 54 of UNITE-HERE, the city's largest gaming union, fears the casinos' desire for wage and benefit cuts could unravel the promise that was made when legalized gambling began in the resort in 1978 - that workers would have relatively high-paying jobs.

"It's clear to me that the industry has definitely walked away from its commitment to both the state and the local economy that these would be good-paying jobs with good benefits," Local 54 President Bob McDevitt said. "It's really up to the community and the union to hold their feet to the fire to make sure they don't do that."

Casino waiter Tony Davila fondly recalled the 1990s, when Atlantic City's free-spending gamblers showered him with generous tips and he was earning between $800 and $900 per week.

Contrast those days with the downtrodden casino market now. Davila, who works at the Plate restaurant at Trump Taj Mahal Casino Resort, said the big tippers are long gone and he is pulling in $400 to $500 weekly.

"My daughter wants to go to college, but I'm not able to save anything," said Davila, 45, of Atlantic City. "Between my car payment, food, bills, and rent, I just can't save any money. We're struggling."

Atlantic City's casinos are struggling, too. In ongoing contract negotiations with the labor union that represents Davila and thousands of other casino service workers, the gaming industry is pushing for financial concessions that could dramatically alter the pay structure in the nation's second-largest gambling market.

Gaming analysts say the proposed austerity measures reflect the realities of Atlantic City's slumping casino industry. The lucrative 1990s that Davila spoke of were prior to the arrival of casinos in surrounding states. Competition, among other factors including the economy, has caused Atlantic City's gaming revenue to plunge from $5.2 billion in 2006 to $3.6 billion in 2010, a decrease of 30 percent.

"All the prior union contracts were negotiated in a monopolistic environment in Atlantic City," said Harvey Perkins, executive vice president of Spectrum Gaming Group, a casino consulting firm based in Linwood. "Subsequently, as we all know, Atlantic City no longer has a monopoly on East Coast gaming. So it's reasonable to assume, given the market dynamics that currently exist, that some economic adjustments may have to take place within the contracts."

Local 54 is negotiating new contracts with 10 of the city's 11 casino hotels. Borgata Hotel Casino & Spa is not involved in the talks because its contract with Local 54 runs through 2012.

Contracts at nine of the 10 casinos expired Thursday. Resorts Casino Hotel is negotiating a new labor agreement following its change of ownership last December but is not facing a deadline. For now, the union says it is willing to continue to bargain, putting any possible strike plans on hold.

However, Local 54 has been staging mass demonstrations at Resorts during the negotiations to protest steep wage cuts made by the new owners. The union is worried that Resorts' lower pay scale - called "poverty wages" by McDevitt - could ripple through the entire gaming industry and serve as a model for other casinos.

"We're going to ratchet up the pressure at Resorts to get them in line," McDevitt said.

Dennis Gomes, co-owner and chief executive officer of Resorts, criticized the union's tactics. Resorts, he said, retained most of the existing workers when the new owners took over and paid Local 54 members at union rates.

"If it's a case of poverty level, then their system is flawed and their contract is flawed, because they negotiated with the entire industry," Gomes said. "It's ridiculous the position they're taking. As far as I'm concerned, it's propaganda."

Local 54 represents 14,000 casino employees, including waiters, cocktail servers, bartenders, cooks, housekeepers, and other service workers. Casinos are demanding that Local 54 members - now earning an average of $12 per hour - accept a 25 percent wage cut, McDevitt said. Local 54 workers also are being asked to contribute to their health care and pension benefits for the first time ever.

"We haven't agreed to any concessions yet," said McDevitt, who suggested the casinos should instead cut costs in other ways that would not affect the livelihood of Local 54 members.

Davila is at risk of losing even more money if casinos succeed in their pursuit of wage and benefit concessions. He said his current $5.26 hourly wage would be rolled back to $4.50 under the casinos' proposal. In addition, he would have to pay $1.20 per hour toward his health care and 83 cents for pension and severance benefits. In all, he estimates he would lose more than $5,000 in income annually.

"People are very nervous," Davila said of Local 54's members. "We've never paid for health care. That's one of the things the union takes pride in, making sure the casinos pay for health care."

Casino executives have declined to discuss any specific contract proposals while negotiations continue. Perkins, however, said the gaming industry simply cannot afford higher labor costs in a shrinking marketplace.

Atlantic City's gaming revenue has declined 36 straight months, and there is little to suggest a market recovery anytime soon, even with the scheduled May grand opening of the new $2.4 billion Revel casino, Perkins added.

Local 54 members are not the only casino workers to suffer. Unions representing trade workers such as operating engineers, painters, and carpenters agreed to wage concessions in contract negotiations earlier this year.

"We go through it all the time. It depends on the environment," said Will Pauls, president of the South Jersey Building and Construction Trades Council. "Even in the building trades in the last couple of years, we have given back some things. If the market's down, you try to help out the businesses you're dealing with. Hopefully, in a few years, the market gets better."

McDevitt, however, drew distinctions between the skilled trade workers and Local 54's members, who largely hold unskilled jobs and depend on tips for most of their income.

"The trades bargained a series of concessions, but there's a huge difference between the level of work my members do and the level of income my people make," McDevitt said. "A tradesperson gets paid a significantly higher wage than a service person."

Davila, a casino worker since 1989, said he depends on tips for 70 percent to 80 percent of his earnings. He explained that his tips have been dropping in recent years, as gaming customers have tightened their spending or simply no longer come to Atlantic City because of casinos in neighboring states.

"Things were lovely in 1989. The tips were good, the money was great," he said. "Now, the tips aren't the way they used to be. We also have competition from Pennsylvania, Maryland, and New York. Before, you would go to Atlantic City to gamble or to Las Vegas to gamble. People have other places to go to now, so it's hurting Atlantic City."