Three Amigos Mull Impact Of Minimum Wage Hikes On Amusement Operators

LAS VEGAS -- "Can you pay a $10 an hour minimum wage to your family entertainment employees?" the Three Amigos asked a packed seminar audience during the Amusement Expo in late March.

Veteran operators Rick Iceberg, C.J. Barrymores (Clinton Township, MI), Ben Jones, Live Oak Bank (Rochester Hills, MI), and George Smith, Family Entertainment Group (Barrington, IL), broached the contentious topic with which many small businesses are struggling. Labor costs and quality are main concerns among FEC owners who desire efficient full- and part-time workers with little staff turnover.

This week, McDonald's said it is raising the minimum wage and introducing paid time off for 90,000 employees in its company-owned stores. The new wage hike of $1 above the local legal minimum wage will affect employees in 1,500 company-owned U.S. restaurants and is part of an effort to make McDonald's a "modern, progressive burger company on many fronts," McDonald's Corp. chief executive Steve Easterbrook said in an op-ed in the Chicago Tribune on Wednesday.

Other national restaurant and retail chains like Starbucks and Walmart have already hiked their minimum wages, and are adding other employee perks. FECs draw from the same labor pool, and the Three Amigos reminded the seminar audience that operators are competing for labor with these big employers.

Amusement operators and other small businesses in Seattle will have to deal with a new $15 minimum wage law that went into effect on April 1. The city's increase is being phased in gradually through 2017 and beyond. In November, San Francisco voters approved their own phased-in minimum wage hike to $15 an hour by July 2018.

"The $10 wage is coming, so why not get ahead?" Iceberg noted.

"Let's lead on this issue, and not be followers," Jones added. "Once McDonald's does, we will need to follow." (McDonald's' increased wage goes into effect on July 1.)

Adding perspective to the issue, Smith asked: "can your employees afford to go to your own facilities and pay for entertainment?"

Operators who raise their base wages cannot necessarily increase the wages of higher-paid employees, Iceberg warned. Both Iceberg and Smith's companies, incidentally, provide insurance to full-time employees.

The Three Amigos reported that while some FEC operators have already moved up to a $10 base wage, they believe the national average base wage for the sector is under $9.

One FEC operator observed that entertainment centers in larger markets are better situated to keep up with rising wages. Other operators pointed out that higher wages will need to be paid for by their customers in higher prices for their attractions and services.

Another operator noted that foodservice jobs are very different from those at FECs. Many qualified young people might prefer working in a fun environment, interacting with customers, even for a lower wage than that paid to the guy flipping burgers, he said.