Lockdowns have crippled movie theaters due to the coronavirus. Now the industry faces further financial troubles as the Biden administration and Congressional Democrats seek another hike in the minimum wage and the $15 an hour proposal is weighing heavily on the minds of theater owners across the country.
“That would kill us,” Byron Berkley, owner of Foothills Entertainment in Kilgore, Texas, told Variety. “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.”
Berkley’s part-time employees make $8 an hour in keeping with the state’s minimum wage. But the theater owner says that a wage hike of nearly double would put them out of business.
Russell Allen, president of Allen Theaters in Las Cruces, was also skeptical of such a significant wage hike. Allen’s theaters pay unskilled workers $10.50 an hour. “I think it’s a real disservice to the young, unskilled employee when we start pricing them out of the market,” Allen told Variety. “We’ve hired 16-year-old kids that don’t know what a broom is, much less how to use it.”
The National Association of Theatre Owners has not yet made a public statement on the latest minimum wage hike being proposed. The organization has spoken out against past wage hikes.
In 2014, for instance, the group opposed the hike then being proposed. “While cinema owners and operators laud efforts to improve the standard of living for all Americans, 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,” the group said in a statement.
Kendrick Macdowell, a former general counsel for the Independent Cinema Alliance, also noted that the wage hike on top of the coronavirus struggles is an even bigger danger to small and independent cinema owners.
“The big circuits have larger margins and buying power that enables them to keep costs to a minimum,” Macdowell insisted. “The independents are operating on such a slim margin.”
Finally, another theater owner, Mark O’Meara, owner of the University Mall Theatre in Fairfax, Virginia, pointed out that three of his four theaters have already been permanently shuttered because of the virus. And now his last theater is endangered by the wage hike.
“We’re kind of caught in a vise here between external factors we have no control over,” Berkley told Variety.
Berkley is right. Last July, for instance, an overwhelming majority of Americans admitted that they are uncomfortable going to the movies due to the ongoing coronavirus scare.
In the poll, 72 percent indicated discomfort at the idea of going to a theater, while 54 percent said it would make them “very uncomfortable.” Another 18 percent indicated it would make them “somewhat” uncomfortable to go out to see a movie.
A recent Congressional Budget Office report warned that the Raise the Wage Act being pushed by President Joe Biden and Democratic lawmakers would increase the price of goods and services and could kill as many as 1.4 million jobs.
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