Imperium Watch: Work Yourself Poor

Just as the Massachusetts Legislature approves plans to bring casinos to the state, we get this headline from the Associated Press: “Casino workers fear falling from middle class.”

The headline tops a report from Atlantic City about proposed cuts in pay for casino workers there because of the downturn in business due to the recession, and to the proximity of 10 competing casinos in Pennsylvania.

Some casino employees in Atlantic City have already taken pay cuts; one interviewed by the AP saw her hourly wage slashed from $14 to $9.51, another from $14.55 to $9.83. Local 54 of Unite-HERE, the union that organizes workers in the city’s casinos, is trying to fend off attempts by casino owners to whittle away more of its members’ income by forcing them to chip in for their health insurance and retirement programs.

Without putting the points in so many words, the AP article makes clear what independent experts on the gambling industry have been saying for years: the jobs created by casinos are not well paid, not far above poverty level for people with families (according to government guidelines for 2011, a family of four with an income of less than $22,350 is below the poverty line).

And the jobs may offer little opportunity for financial advancement; the woman whose pay was cut from $14 to $9.51 an hour had worked for Resorts Casino Hotel for 18 years.

In 2009 an NBC-affiliated television station in Columbus, Ohio fact-checked a proposal to build four casinos in that state. Its findings:

“More than half of the… jobs fall into three categories which average less than $23,000 a year in pay.

*22 percent of casino jobs: Food preparation and service workers. Average salary: $19,500.

*20 percent of casino jobs: Gaming dealers and slot key persons. Average salary: $21,700.

*14 percent of casino jobs: Machine servicers, cashiers and other gaming service workers. Average salary: $22,900.”

The station’s report concluded that a casino would move people out of unemployment, or off welfare—but just barely off welfare. And that wasn’t taking into account wage reductions like those that have hit casino workers in Atlantic City.

The AP story about Atlantic City also underscores the point that the micro-economies that grow up around casinos are boom and bust compared to the older economies nourished by viable manufacturing industries.

Las Vegas itself, the glittering international gambling and amusement capital, crashed so hard when the recession hit that it could just as well be called a foreclosure capital. Its unemployment rate rocketed from 4 percent in May of 2007 to 12.3 percent in June of 2009—more than eight percent in two years.

No government that can’t think of a more constructive way to rebuild a sagging economy than this overused gambit—now failing in places better adapted to support casinos with secondary attractions than Massachusetts—can call itself a creative or farsighted investor in economic development.

Author: Stephanie Kraft

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