Atlantic City Casino Workers Vote to Strike on July 4 If They Are Not Given a Fair Contract Offer
Workers at four Atlantic City casinos voted to authorize a strike if the Unite Here Local 54 was not given a fair contract by the start of the July 4 holiday weekend. The Thursday vote for a potential strike is said to have passed by an overwhelming margin.
The threat of a strike over Independence Day weekend should give the workers a bit more leverage in negotiations, because a strike would shut down operations in the 4 resorts over the most lucrative stretch of the year. Unite Here is negotiating on behalf of 6,000 cooks, cocktail waitressses, housekeepers, and hospitality workers. At the moment, all of the workers are working under expired contracts.
Bob McDevitt Discusses a Fair Contract
Local 54 President Bob McDevitt released a statement about the negotiations. McDevitt said, “They need to offer these workers a fair contract. We gave up a lot when times were bad, now that they are making money, they need to give back to us.”
According to McDevitt, a full 96% of the workers voted for a strike. Unite Here says the workers agreed to a freeze in wages during the recession. Workers with 25 years of experience have received only 80-cent in wage increases over the past 12 years.
Carl Icahn’s Influence
The wage freeze was given in return for the retention of health and pension benefits. In October 2014, Carl Icahn and Trump Entertainment won through a court case the right to take away those health and pension benefits, thus circumventing 12 years of labor negotiations. Unite Here gave away wage increases for nothing, due to the decision of one judge.
Story of a Typical Casino Worker
Rodney Mills, a 42-year old buffet drink server at the Tropicana, said he has worked at the casino for more than 20 years, but he still makes only $11 an hour after all those years of service. Mr. Mills told CNBC, “I work full-time but I’m still struggling to make ends meet.”
The union said the casino industry is showing signs of a turnaround, so the casinos need to pay their workers better, now that prosperity is returning to the city’s 8 casinos. All of the casinos are now profitable, after 4 casinos were closed in 2014. In Quarter 1 of the 2016 fiscal year, Atlantic City’s casino industry earned 2.7% to $802.6 million.
PILOT Bill Tax Break
The casinos also received tax breaks in the recent Payments In Lieu of Taxes (PILOT) bill, which set a specific tax on Atlantic City casinos. The PILOT bill did away with the need for costly tax appeals, so the casino industry should be able to plan its future business with a clearer insight. Also, if growth occurs, the casinos will pocket higher profits. Thus, the Atlantic City casino industry should be well-disposed for the future, according to the workers.
Casino ownership are going to counter that the future remains uncertain in Atlantic City. The November referendum on North Jersey casinos could set up competition within the state for gambling dollars for the first time. North Jersey casinos would be an existential threat to Atlantic City casinos. Mark Giannantonio of Resorts Casino predicted 5 of the 8 Atlantic City casinos would close, if the North Jersey casino initiative passed.
The Four Casinos
The four casinos in question include Tropicana, owned by Carl Icahn. The other three casinos are owned by Caesars Entertainment or its divisions: Caesars Atlantic City, Bally’s Atlantic City, and Harrah’s Atlantic City.
Caesars and Bally’s are owned by the Caesars Entertainment Operations Corporation (CEOC), which is in bankruptcy. Harrah’s Atlantic City is owned by Caesars Entertainment (which is not in bankruptcy), the parent company of CEOC.