While theatres continue to get ravaged by the coronavirus pandemic, the moviegoing industry is also paying attention to the federal government’s moves. With Congress pushing to raise the federal minimum wage to $15 an hour, the theatre industry strongly opposes the plan.
According to Variety, executives within the moviegoing business claim that the increase to the minimum wage would “kill” the theatre industry, arguing that it’s not sustainable for business. It’s worth noting that big chains like AMC and Regal keep only about 50% of the money they take from ticket sales each year, while smaller theatres keep roughly 40% of their ticket sales.
“That would kill us,” said Byron Berkley, owner of Foothills Entertainment in Kilgore, Texas. “We couldn’t justify raising our admission prices and concession prices to compensate for that kind of increase and still expect people to patronize the business. It would be disastrous.” Workers in Kilgore make a minimum of $7.25 an hour, with the poverty line hovering at $6. Those employed by Berkley at Foothills Entertainment allegedly make just $8 an hour.
The federal minimum wage currently sits at $7.25, though most states have higher minimums. California, for example, has one of the highest minimum wages in the U.S. at $13 an hour. The only states to top California are New York and Washington, D.C., which have a $15 minimum.
Democrats in Congress are looking to bump the minimum wage up nationwide to $15 an hour by 2025. This would be the first time the minimum wage has increased since 2009, which saw the minimum wage get a paltry boost from $6.55 an hour to $7.25 an hour. Several states, including California and Illinois, are on track to meet that pledge in the four-year time frame.
Other executives within the moviegoing industry claim the increase to the minimum wage would be a “disservice” to unskilled employees who might find themselves in lucrative roles when they have no one to support but themselves. In other words, theatre bosses are concerned that the $15 minimum might stymie economic growth and employment prospects.
“I think it’s a real disservice to the young, unskilled employee when we start pricing them out of the market,” said Russell Allen, president of Allen Theatres in Las Cruces, New Mexico. “We’ve hired 16-year-old kids that don’t know what a broom is, much less how to use it.”
While the lobbying group the National Association of Theatre Owners has yet to comment on Democrats’ renewed interest in raising the minimum wage, the organization opposed the plan back in 2014, noting that a theatre job is typically a new, younger worker’s first job.
“While cinema owners and operators laud efforts to improve the standard of living for all Americas, NATO believes that applying a universal wage increase to economically disparate regions would stifle both the nation’s economic growth and employment prospects for first-time workers,” NATO said when the minimum wage was proposed to increase to $10.10.
Big theatres, like AMC and Cinemark, might survive the minimum wage increase, according to Kendrick Macdowell, the former general counsel of the Independent Cinema Alliance.
“The big circuits have larger margins, and buying power that enables them to keep costs to a minimum,” Macdowell told Variety. “The independents are operating on such a slim margin.”
