Casino Workers Fear Wage Cuts in Atlantic City

A huge cut in the pay at the Resorts Casino Hotel in Atlantic City has other casinos worried that wages might drop throughout the entire city, if not the entire industry.

When new ownership purchased Resorts last year, they looked for ways to turn around the fortunes of a casino that had been losing money for years. One of the first steps they took was to begin hiring and rehiring workers at much lower wages than they previously received. According to union officials, worker pay was cut by around 40% on average.

According to a report in the Wall Street Journal, cocktail servers, waiters, and other staff that rely on tips have been especially hard hit. Along with cuts in their pay that average close to 50%, they’ve also taken a hit in tips, as the struggling economy and the hurting Atlantic City casinos mean there are fewer people in the casinos – and the ones that are there are spending less on average.

Now, the dispute over wages could come to a head, as the contract between Unite Here Local 54 – which represents housekeepers, wait staff and bartenders – and ten of the city’s eleven casinos will end on Wednesday night. The results of the ongoing negotiations could set a trend for the industry, especially if casino owners are able to clamp down on employee salaries.

Generally, casinos are seen as providers of reasonably well-paying jobs for unskilled workers – jobs that are increasingly hard to find in today’s economy. Casino employees generally have higher wagers and more significant benefits packages than those who hold similar jobs in hotels or other establishments.

However, casinos have cut back on hiring in recent years as a response to the struggling economy. Since 2006, about 30,000 jobs have been lost in the American casino sector, despite the expansion of casino gambling in many parts of the country.

For many casino owners, the cuts are seen as a necessary step to return some unprofitable casinos back to money-making enterprises. For instance, Resorts was losing nearly $3 million per quarter in 2010.

However, unions maintain that other expenses are to blame for the losses, not employee compensation. In the Wall Street Journal article, it is pointed out that while the casino has saved nearly $5 million in payroll since last year, the casino is actually losing even more