Hospitality industry ailing, but one casino is raising wages.
Will other big employers follow their lead?
Shanti Duroux has done more jobs than most at the Graton Resort and Casino during his four years there. He’s tended bar, managed one of the restaurants, and now repairs machines on the casino floor, paying out the occasional jackpot.
Earlier this month, Duroux and the other 2,000 employees at the casino hit a sort of jackpot of their own when their hourly pay was voluntarily increased by a minimum of between $2.50 and $3.25. Workers who earn tips will see their pay increased to $17.50 per hour while nontipped workers will get $18.50 hourly. Salaried employees will see bonuses of 10% and the company pays in full for employee medical plans if they work more than 20 hours per week along with providing meals.
The increases go against the trend established during the pandemic for workers in the hospitality industry. Statewide, more than 700,000 jobs were lost in the industry because of the pandemic since February 2020, although some have started to come back more recently.
Located on tribal land in Rohnert Park, the casino falls under the purview of the Federated Indians of Graton Rancheria and is therefore not subject to county or state shutdown rules as sovereign land. The pay raises and other benefits provided to workers are deeply entwined with the tribe’s ethics, according to Tribal Chairman Greg
Sarris. “We believe in creating home not just for ourselves but for those who work and live with us,” Sarris said.
The extra hourly pay and benefits help temper the already high cost of living in the Bay Area and financial stresses like child care that have mounted during the pandemic.
“The cost of living in the Bay Area is so high and so many people pay a really large portion of their income towards rent,” said
Aamir Deen, the president of Unite Here Local 49, which represents casino workers like Duroux. “This makes that portion more manageable,” he said of the pay raises.
Duroux and his fellow employees accounted for some of the lost jobs early in the pandemic when the casino closed temporarily during the initial days of the virus’ spread. Duroux said he was thankful the company paid two months of wages during the closure and continued
“It might reflect a shift in norms around how well workers should be paid.”
Clemens Noelke, Brandeis University professor
paying for employee healthcare during the roughly three months they could not work.
Back at work since the end of June, Duroux said he’s now making close to $20 an hour, money he can use to pay for the classes he’s been taking at Sonoma State University where he will get his bachelor’s degree in history this spring.
“If I was scrambling around trying to find jobs and worrying about health insurance and where I’m going to get the next meal, I wouldn’t have time to go to school,” he said, adding that he isn’t sure yet what he wants to do with his degree, but that he hopes it will open up more career options.
Sarris, the tribal chairman, said the casino is operating at 25% capacity under health orders, but business has been humming. The business received funding from the federal Paycheck Protection Program, “but not enough to cover what we spent” in equipping themselves to reopen safely, he added.
Temperature scanners now adorn the entrances and a roving team of “safety ambassadors” remind people to wear their masks when not eating, drinking or smoking. Since the reopening in June, Sarris said all 2,000 employees are tested once every two weeks.
Voluntary wage increases like those at Graton are rare, but not unheard of. They have also been shown, in some circumstances, to affect what other businesses pay, at times driving wages up.
Recent research has shown that voluntary pay increases by online shipping giant Amazon likely buoyed wages at nearby businesses in the locations where they operate.
Amazon announced a $15 per hour minimum wage for workers in 2018. Along with putting upward pressure on wages, those increases did not lead to significant job losses, the research by professors at UC Berkeley and Brandeis University found.
“It might reflect a shift in norms around how well workers should be paid,” said Clemens Noelke, a professor and one of the authors of the paper at Brandeis. “If a big employer sets an example, then maybe that induces others to do the right thing.”
Graton is the third largest employer in Sonoma County with around 2,000 employees, according to the Santa Rosa Metro Chamber business group.
Still, the effects of the wage increase may be limited by its size in an industry still reeling from pandemicrelated closures.
“As our economy reopens and lodging and other hospitality industry businesses reopen, finding employees will remain a challenge,” said Sara Cummings, executive director of the Sonoma County Hospitality Association, in an email. Cummings said changes brought by the pandemic, like increased child care duties for working parents and people leaving the region to escape high living costs, could force businesses to compete for a shrinking pool of workers.
“Members of our industry will need to assess the market once it returns and make adjustments to wages offered, if needed,” she said.
One factor that has been shown to drive up wages in a given area is penetration of unions. “In unionized settings you are more likely to see both higher wages and better benefits,” said Ken Jacobs, who chairs the UC Berkeley Labor Center.
That effect can also extend to nonunion workers when there are a high percentage of unionized workplaces. “If there’s enough unionization in an area the threat effect leads to other nonunion employers in the industry or geographic area raising wages,” to stave off unionization and hold onto workers, Jacobs said.
That phenomenon is not just passive. Union organizers can and do use examples of higher wages and better benefits in the same industry or location to bargain for a better deal for their members. Being able to point to instances of higher wages and benefits can be a powerful bargaining chip, especially during difficult economic times.
“In labor and hospitality there’s very few factors that drive up the standard and quality of the jobs,” Deen, the union leader, said, adding negotiations often focus on “tiny, incremental increases that generally don’t sync up with the standard and the cost of living.”
But more than being just a lever to pull in negotiations, Deen said the step up in pay at Graton will go a long way in helping employees pay for the necessities of life in one of the most expensive regions in the country.
“It’s a really remarkable thing in the middle of the pandemic,” he said. “People’s lives are really going to be changed in significant ways.”