Las Vegas casinos, union negotiating pay raises for workers

Updated May 30, 2018 - 8:45 pm

Las Vegas’ two largest casino operators are trying to bridge a roughly $110 million wage and benefit gap with union workers before employment contracts officially end at midnight Thursday.

The five-year contracts affect about 50,000 Las Vegas hospitality employees, including bartenders, servers and housekeeping staff at 34 resorts on the Strip and downtown.

Negotiators for union workers are threatening to call a strike if an agreement isn’t reached by the deadline, potentially impacting tens of thousands of guests expected to arrive at the beginning of June for conventions and hockey games.

MGM Resorts International and Caesars Entertainment Corp., the two largest resort operators by employment, have said they expect to reach a deal and avoid the first citywide strike in more than three decades. (Wes Rand/Las Vegas Review-Journal)

A monthlong strike could cost MGM Resorts and Caesars as much as $300 million in cash flow, according to a report Wednesday by UNITE HERE Gaming Research, the research unit of the hospitality workers’ union. The calculation assumes a 10 percent drop in revenue and a 10 percent decline in margins.

4 percent

In a statement Wednesday, Culinary Local 226 and Bartenders Local 165 said they are seeking an average annual increase of 4 percent over the next five years in workers’ wages and benefits, such as health care and pensions.

“We are asking for one-dollar raise in the first year,” Francisco Ruffino, a Caesars cook, said in the union statement. “A one-dollar raise for 12,000 of us will cost less than what the company paid the CEO last year.”

Caesars CEO Mark Frissora received $23.9 million in total compensation last year after helping the company emerge from two-year bankruptcy proceedings. That was 600 times more than the median salary of a Caesars employee. Caesars spokesman Rich Broome declined to comment Wednesday.

MGM Resorts CEO Jim Murren took home $14.6 million in total compensation, or about 400 times as much as the median for its employees. An MGM spokeswoman said Wednesday the company is “confident that we can resolve the outstanding contract issues and come to an agreement that works for all sides,” but she did not comment on CEO compensation.

The unions said MGM Resorts and Caesars are offering an average annual increase of about 2.7 percent. The two companies operate 18 of the resorts impacted by the talks, and their settlement with the union would set the standard for the remaining operators.

A 4 percent increase in wages and benefits is “probably a little bit on the high side,” said Union Gaming analyst John DeCree. However, with consumer price inflation hovering around 2 percent and expected to stay around there in the coming years, “somewhere in the 3 percent range is reasonable.” (Las Vegas Review-Journal)

U.S. wage growth

Union workers received an average annual increase in salary and benefits of about 2.2 percent over the past five years, according to the unions’ statement.

By comparison, U.S. private, non-farm hourly wages rose on average 2.5 percent a year over the past five years, while U.S. leisure and hospitality workers received an average hourly wage increase of 3.4 percent a year, according to the Bureau of Labor Statistics.

Contract negotiations in 2013 came amid a battered local economy struggling to emerge from the worst economic downturn in decades. MGM Resorts and Caesars were handcuffed by a mountain of debt racked up during the booming 2000s.

This time around, the casino operators — and their properties — are in their best shape in more than a decade. They have completed upgrades costing billions of dollars and reduced their leverage. Their share prices have rebounded.

Now they are returning money to shareholders for the first time since the financial crisis and awarding executives. MGM Resorts this month announced it would buy back $2 billion of its shares over the next three years, equivalent to more than 10 percent of the company. Caesars announced it would purchase $500 million of its shares, or about 6 percent of the company.

The unions are seizing on the buybacks, executive pay and corporate tax cuts that go into effect this year to demand an increase that would likely be above the U.S. average this time around.

Contact Todd Prince at 702-383-0386 or tprince@reviewjournal.com. Follow @toddprincetv on Twitter.

ad-high_impact_4
Business
AGS partners with Vegas Golden Knights
AGS is the nation’s second-largest manufacturer of Class II slot machines used primarily in tribal jurisdictions. It announced a marketing partnership with the Vegas Golden Knights NHL team. (Las Vegas Review-Journal)
Lehman Brothers bet big on Las Vegas
Lehman Brothers collapsed 10 years ago, helping send the country into the Great Recession.
Fremont9 opens downtown
Fremont9 apartment complex has opened in downtown Las Vegas. (Marcus Villagran/Las Vegas Review-Journal) @marcusvillagran
Ross & Snow launches in Las Vegas
Luxury shoe brand Ross & Snow has opened in Las Vegas, featuring "functional luxury" with premium shearling footwear. (Bailey Schulz/Las Vegas Review-Journal)
Remote Identification and Drones
DJI vice president of policy and public affairs discusses using remote identification on drones. (Bailey Schulz/Las Vegas Review-Journal)
Drones and public safety in Nevada
Two representatives in the drone industry discuss UAV's impact on public safety. (Bailey Schulz/Las Vegas Review-Journal)
Frontier Airlines to launch flights from Las Vegas to Mexico
Frontier, a Denver-based ultra-low-cost carrier, will become the first airline in more than a decade to offer international service to Canada and Mexico from Las Vegas when flights to Cancun and Los Cabos begin Dec. 15. (Rick Velotta/Las Vegas Review-Journal)
MGM Resorts International CEO Jim Murren addresses Oct. 1 lawsuits
MGM Resorts International Chairman and CEO Jim Murren addresses criticism his company has received for filing a lawsuit against the survivors of the Oct. 1 shooting. (K.M. Cannon/Las Vegas Review-Journal)
MGM Resorts International opens the doors on MGM Springfield
Massachusetts’ first hotel-casino opens in downtown Springfield. The $960 million MGM Springfield has 252 rooms and 125,000-square-feet of casino. (K.M. Cannon/Las Vegas Review-Journal)
MGM Resorts International prepares to open MGM Springfield
Las Vegas-based MGM Resorts International gave news media and invited guests a preview of the $960 million MGM Springfield casino in Massachusetts. The commonwealth's first resort casino will open Friday, Aug. 24. (K.M. Cannon/Las Vegas Review-Journal)
A Walk Through Circus Circus
It only takes a short walk through Circus Circus to realize it attracts a demographic like no other casino on the Strip: families with young children. (Todd Prince/Las Vegas Review-Journal)
Morphy Auctions, a vintage slot machines seller, wants gaming license
Vice president Don Grimmer talks about Morphy Auctions at the company's warehouse located at 4520 Arville Street in Las Vegas on Thursday, Aug. 16, 2018. (Rick Velotta/Las Vegas Review-Journal)
Nevada's venture capital money doesn't stay in state
Zach Miles, associate vice president for economic development for UNLV, said there’s venture money in Southern Nevada, “but trying to find the right groups to tap into for that money is different.” According to a 2017 report from the Kauffman Foundation, Las Vegas ranked number 34 out of 40 metropolitan areas for growth entrepreneurship, a metric of how much startups grow. With a lack of growing startups in Las Vegas, investment money is being sent outside of state borders. The southwest region of the U.S. received $386 million in funding in the second quarter, with about $25.2 million in Nevada. The San Francisco area alone received about $5.6 billion. (source: CB Insights)
Neon wraps can light up the night for advertising
Vinyl wrap company 5150 Wraps talks about neon wraps, a new technology that the company believes can boost advertising at night. (Marcus Villagran/Las Vegas Review-Journal) @brokejournalist
Nevada on the forefront of drone safety
Dr. Chris Walach, senior director of Nevada Institute for Autonomous Systems, talks to a reporter at NIAS's new Nevada Drone Center for Excellence of Public Safety, located inside the Switch Innevation Center in Las Vegas. K.M. Cannon Las Vegas Review-Journal @KMCannonPhoto
Motel 8 on south Strip will become site of hotel-casino
Israeli hoteliers Asher Gabay and Benny Zerah bought Motel 8 on the south Strip for $7.4 million, records show. They plan to bulldoze the property and build a hotel-casino. Motel 8 was built in the 1960s and used to be one of several roadside inns on what's now the south Strip. But it looks out of place today, dwarfed by the towering Mandalay Bay right across the street.
Project billed as one of the world's largest marijuana dispensaries plans to open Nov. 1
Planet 13 co-CEO Larry Scheffler talks about what to expect from the new marijuana dispensary, Thursday, July 19, 2018. (Marcus Villagran/Las Vegas Review-Journal) @brokejournalist
Oasis Biotech opens in Las Vegas
Brock Leach, chief operating officer of Oasis Biotech, discusses the new plant factory at its grand opening on July 18. (Bailey Schulz/Las Vegas Review-Journal)
UNLV Tech Park innovation building breaks ground
Construction on the first innovation building at the UNLV Tech Park is underway. (Bailey Schulz/Las Vegas Review-Journal)
Caesars Forum Meeting Center
Caesars broke ground Monday on its $375 million Caesars Forum Meeting Center (convention center) just east of the High Roller observation wheel. (Caesars Entertainment)
Technology reshapes the pawn shop industry
Devin Battersby attaches a black-colored device to the back of her iPhone and snaps several of the inside and outside of a Louis Vuitton wallet. The device, installed with artificial intelligence capabilities, analyzes the images using a patented microscopic technology. Within a few minutes, Battersby receives an answer on her app. The designer item is authentic.
Recreational marijuana has been legal in Nevada for one year
Exhale Nevada CEO Pete Findley talks about the one year anniversary of the legalization of recreational marijuana in Nevada. (K.M. Cannon/Las Vegas Review-Journal)
Young adults aren't saving for retirement
Financial advisors talk about saving trends among young adults. (Bailey Schulz/Las Vegas Review-Journal)
TOP NEWS
News Headlines
Add Event
Home Front Page Footer Listing
Circular
You May Like

You May Like