Unions drive up LV casino wages

David Strow

Thursday, April 6, 2000 | 11:16 a.m.

A new UNLV study suggests wages among Las Vegas casino service workers are being driven up by the city's powerful union presence -- even for workers that aren't organized.

The study by UNLV economics professor Jeff Waddoups appeared in the April 1 issue of the Journal of Labor Research. Waddoups reported there's a 24 percent difference between the average wages of Clark County casino service workers in "highly unionized" professions and their counterparts in Washoe County.

The largest single factor in that gap, Waddoups said, is the control exerted by unions over the Las Vegas labor market, particularly on the Strip. An estimated 29 percent of Las Vegas' hotel-casino labor market belongs to a union.

By comparison, union representation is nearly nonexistent in Reno's hotel-casinos -- just 1.5 percent of the work force, Waddoups estimated.

"Hotel-casino workers in Las Vegas, whether they're union or not, tend to earn relatively high wages," Waddoups said. "I attribute that to what literature calls the union threat effect.

"The union sets the standard, and it's a powerful enough force in the labor market here that if the non-union properties want to get the same quantity or quality of labor, they pretty much have to meet the union standard."

The difference becomes all the more significant considering two factors -- one, that Reno's cost of living is about 10 percent higher than Las Vegas, and two, that Washoe County's overall per capita income is more than $30,000, 15 percent higher than Clark County.

The study used 1996 employment data gathered by the Nevada Department of Employment, Training and Rehabilitation.

Ultimately, the study found 14 of the 21 casino service job classifications in Washoe County had average wages below the poverty level. By comparison, only four of the 21 classifications were below the poverty level in Clark County -- and all of these categories were not unionized.

Waddoups concludes that the gap could serve as a warning that wages across America may grow further apart without union influence.

"If the experience of Washoe County's (hotel-casino) industry is the norm for wages in the nonunion service sector occupations, then wages in an expanding sector of the economy will certainly be under or hover around commonly accepted measures of poverty for a growing proportion of workers," Waddoups wrote.

"Deunionization of the U.S. work force has mirrored the trend of jobs paying wages at or below the poverty level."

Las Vegas bartenders enjoyed the largest advantage over their Reno counterparts, with an 80 percent average wage difference. Other high differences were noted among casino hosts and hostesses (75 percent), parking lot attendants (75 percent), switchboard operators (60 percent) and waiters and waitresses (52 percent).

But the trickle-down effect to nonunion workers does not cross into classifications where unions have no foothold in Las Vegas, the study suggests. Among nonunion job categories, Clark County's wage advantage was just 6 percent, and in some categories, Reno workers actually earned more.

Reno's attitude toward unions isn't likely to change any time soon, Northern Nevada officials and experts say.

"Reno has not had the kind of growth that brought in people who worked in union environments," University of Nevada, Reno, gambling expert Bill Eadington said. "The Reno market has never been as buoyant as Las Vegas, and that buoyancy leads to unionization."

Ferenc Szony, president of Reno's Sands Regency, said another factor is that Reno casinos tend to be privately held, while Las Vegas casinos are typically owned by corporations. As a result, he said, Las Vegas workers have seen more of a need to have union representation.

"This is probably not perceived as an overall union-supporting community," Szony said. "So they meet with some real challenges. It's a much more challenging environment (to unionize)."

Szony was president of the Reno Hilton in 1995, when the Carpenters Union launched an unsuccessful attempt to unionize that property. But Szony said the resistance came from the workers.

"The work force wasn't as predisposed to unionize," Szony said.

He disputed the conclusions of the UNLV study. Rather than union influence, Szony said the differences in wages reflected the lower profitability of Reno's casinos.

"If you have a profitable operation, you're far more prone to share that with your workers, if your intent is to keep a solid, happy work force," Szony said. "I don't think the idea of greedy ownership really prevails in any industry.

"If a company is profitable and doing well, it behooves them to make sure their employees are doing well."

Another factor to be considered is the rapid growth of the Las Vegas employment market. Employment rose an average of 5.48 percent a year in Las Vegas from 1989 to 1995. Over the same period in Reno, employment rose 1.95 percent annually.

"The stronger the economy, the greater the demand for workers," said Keith Schwer, director of the Center for Business and Economic Research at UNLV. "That's going to drive up wages."

However, Schwer noted, "the stronger union presence will restrict labor supply, and that tends to drive up prices."

What's difficult to ascertain, Schwer said, is how much influence the union effect has had on driving the hot Las Vegas economy.

"The more income people have, the greater their consumption," Schwer said. "But without some detailed work, it's difficult to unravel the contribution of each effect."

Waddoups, however, said his study took many additional factors in consideration -- and that the 24 percent wage gap was calculated to focus solely on the union effect. About 44 percent of the difference between Clark and Washoe casino service wages is the direct result of unions, he concludes.

"It's not too far off from what we might expect for similar workers across the country," Waddoups said. "This shows the union wage premium workers get here is not that much different from union wage premiums in general, experienced by workers in other parts of the country."