Want Exemption from a Higher Minimum Wage? Just Lobby Like Heck

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Amusement Park

March 3, 2014; Washington Post

This must make nonprofits advocating for a living wage apoplectic. In Maryland, Governor Martin O’Malley has been pushing legislation to raise the state’s minimum wage to $10.10 an hour. In the Maryland General Assembly, dominated by O’Malley’s fellow Democrats, the House Economic Matters Committee inserted a couple of changes before voting to bring the bill to a vote by the full House.

First, it delayed the minimum wage increase so that it would rise in three steps, not reaching $10.10 an hour until 2017, six months later than O’Malley had proposed.

But more egregious than the six-month delay is the series of exemptions that the committee carved out for certain interests. In response to lobbying by restaurants and bars, the legislation exempts restaurants and bars with less than $250,000 in gross income from having to pay the minimum wage. Moreover, for restaurant and bar staff whose incomes depend largely on tips, it established an hourly rate of $3.63 plus tips, with the expectation that if the combination of $3.63 plus tips doesn’t reach the new minimum wage level, the employer would make up the difference. O’Malley had wanted a higher base salary than $3.63.

The most egregious exemption is this: Amusement parks, like Six Flags, located in Prince George’s County, would be exempt from the higher minimum wage entirely. Like Walmart, which opposed the minimum wage bill in Washington, D.C., Six Flags America is a big company—by its own description, the largest regional theme park in the world, with 16 theme parks in the U.S. plus one in Canada and one in Mexico.

The argument of Del. Dereck E. Davis (D-Prince George’s), the chair of the committee, was that minimum wage workers at Six Flags are typically young kids, not workers trying to support families on their earnings. Of course, that’s the same argument used by big box retailers and many other minimum wage employers: Minimum wage workers aren’t supporting families, but rather breaking into the labor market, getting work experience, supplementing other income, etc.

Writing for Forbes, Cedric Muhammad says that the Six Flags exemption shouldn’t be a surprise, but a lesson to Democrats. In arguing against the application of Prince George County’s recently enacted minimum wage of $11.50 an hour (by 2017) to Six Flags workers, council member Derrick Leon Davis said that the entry-level teenagers and seasonal workers at Six Flags didn’t expect nor should warrant more than the $7.25 an hour at the bottom of its pay scale. Moreover, Davis said that Six Flags, having only come out of bankruptcy in 2009, could pick up and move, depriving the county of a lot of employment for teenagers and a lot of tax revenue.

Essentially, despite having done better in its third quarter of 2013 than ever in its history, Six Flags’ argument is something like “too big to fail”—it implies that it is too big for a living wage. That doesn’t make sense. If the major source of income for Six Flags is the sale of season passes for somewhere between $65 and $100, how much would Six Flags have to increase the season pass price if it paid its employees $10.10 or $11.25—and how price sensitive is the season pass?

As with the erroneous notion that Walmart employees are part-timers or entry-level workers who don’t expect more than $7.25 an hour, the dynamics of theme park employment are changing. “As the nature of our economy changes, more and more adults are taking these low-wage seasonal jobs,” said Tsedeye Gebreselassie, a staff attorney for the nonprofit National Employment Law Project. “The myth is that they’re for teenagers, but that’s increasingly untrue.”

The idea that Six Flags cannot afford a higher minimum wage rubs some people the wrong way. Ross Eisenbray of the Economic Policy Institute challenges Six Flags to make its case public:

“There’s one easy way to find out: require the company to open its books and let the public know what it can and can’t afford. What was Six Flags’ profit last year and the year before? What does it pay its CEO and its top five executives? Could a raise for its low-wage employees be offset by a modest cut in executive compensation? What kind of perks and expense accounts do the executives have? What is Six Flags paying its lobbyists? Could it take $10 or $15 an hour off what it pays its lawyers and lobbyists to make up for the higher minimum wage?”

Perhaps Six Flags finds Eisenbray’s sort of challenge beyond the pale, but for organized labor, and for the young and old employees of Six Flags itself, the answers are important. Unfortunately, the members of the Maryland General Assembly who have decided to give Six Flags its exemption don’t agree.—Rick Cohen

  • Jake

    I used to work in human resources for six flags years ago. We would hold these meetings to discuss our work force, how to motivate staff, how to draw in new employees, so on and so forth, and every time we had these meetings or company wide “discussions” the issue of wage always came up. The company isn’t as rich as it looks in the commercials, but it can definitely afford to invest more financial resources into employee wages, benefits and equipment. Six flags employs a lot of seasonal employees and maybe a teen coming out of high school or a first year college student doesn’t need a $16/hr job, but we had people in the technical fields who made next to nothing when compared to those with similar job titles at different companies. I’m referring to maintenance, shop/stage techs, information systems, ride mechanics who were hired based on having substantial education and/or technical experience in their field and their wages would range anywhere from $8.25 to 12.50 an hour to keep the park operating. These individuals would work for low pay with minor health benefits (today they have to pay out of pocket for all health care). Even those outside the technical fields would only see a 25 cent increase to switch from being a regular staff member into a lead/supervisor. That is wholly unacceptable. They could be making 10.50 flipping burgers in some places. The company back then, and I would venture to say even now, experienced huge turnover because it would get these employees, they’d be there for a few months, then they’d jump ship because they couldn’t make a living off working 2-4 days for 6-8 hours for a low wage. So what Six Flags gets in all it’s parks is an ever changing staff that isn’t knowledgeable about the park/product, the company has to waste time and money training people all the time who aren’t even going to stay (meaning you consistently get employees who are unable to adequately help guest) The staff morale is low because of working conditions and negative attitude rubbing off from employees who’ve been there longer, and you get a staff that knows they can get paid working somewhere else for higher pay. I sat in on an re-orientation at one of the parks one time about a year or two ago and the hr supervisor told the group of employees that they were a family and the company was in it’s corner. If you could just hear the laughter from some of the seasonal employees when those words were said. They laughed like they heard the biggest joke in the world. It was sad and yet it was justified. They didn’t believe in the company and they didn’t believe in all the positive fluff that was coming out of their administrators mouths when compared to the experience.

    Even if you were to raise the wage of every single of it’s 39,000 ish employees by a dollar and even supposing those employees worked 40 hours a week for a year (which doesn’t happen), Six Flags can more than cover the cost from it’s quarterly earnings (i mean you’re looking at roughly a mid $70 million dollar cost vs an $80 million take, meaning that you’ll still see an estimated $170 million dollar profit even if you discount that profits have been increasing). So why is the company so against increasing the wage? And what justification are they giving that the state and gov’t are letting them off the hook?

    They say “it’s because most of are staff are minors and students”. Well, while it is true that the company hires as young as 14/15 yr olds, most employees from that age ranged are limited by the number of hours they can work and the type of jobs they can do (depending on state, some can’t work around forms of machinery or chemicals). So because of these limitations, most of the departments within the park don’t want to hire minors. They’ll take a few to meet their quotas, but for the most part, they want fully available adults or fully available teens (with high school diplomas). So the arguments of Davis are off and if you look at the work force composition of Six Flags a higher number of adults (semi-retirees, recent college grads, and people in need of a job to support a family) is increasing. How can Six Flags say that someone can live or support themselves on such a meager wage when that person will probably make $200-400 a week and get backlash from working a second job on the side.

    Spending money the right way has never been the company’s strong point. They’ll spend 20 million dollars to build a roller coaster, and have these nice vehicles in the park, but go behind the scenes and the equipment, vehicles, and tools used by the staff are horrendous and unsafe, their budgets are low and restrictive, and the staff works for an extremely low wage. I was talking to an old friend who works at one of the parks and she was talking about how her staff drives these old beat up pick up trucks, with non functioning seat belts and a homemade gearbox. Instead of reporting the safety issues, she just laughs it off and says “you know that’s just how six flags”. What in the world? That is definitely a law and safety violation but the company probably won’t address the issue until one of those kids driving that truck gets into an accident and they’re faced with a lawsuit. At which point the company will try to blame the driver.

    Six Flags needs to stop this nickel and dime mentality it has towards it’s work force. Pay a little bit more money for a better employee experience, and they’ll probably see a much better turnaround in guest experience and profit as well.