Movie theater owners warn that the proposed federal minimum wage increase will be “disastrous.” The business was destroyed in 2020, due to the public health crisis, which still continues. As of this writing, more than 60% of North American movie theaters remain closed, although there is a light at the end of the tunnel. According to analysts, there is a good chance that theaters could open this summer or fall, which means people are likely to return to see a new movie.
While news about the pandemic is starting to improve a bit for movie theaters, owners are warning of another big challenge ahead. Congress has proposed an increase in the federal minimum wage, which has not happened since 2009. As it stands, the federal minimum wage is $ 7.25 and Democrats are pushing for $ 15 by 2025, which theater owners they believe it will kill their business. “That would kill us,” said Byron Berkley, owner of Foothills Entertainment in Texas. “We couldn’t justify raising our admission prices and concession prices to offset that kind of increase and still expect people to sponsor the business. It would be disastrous.”
Movie theaters rely on part-time workers earning around $ 7.25 to keep their overhead low and maximize profits. However, some states have been increasing the local minimum wage over the years, which would also be affected by the federal increase. “I think it’s a disservice to young, unskilled employees when we start pulling them off the market,” said Russell Allen, president of Allen Theaters in Las Cruces, New Mexico. “We have hired 16-year-olds who don’t know what a broom is, much less how to use it.”
The National Association of Theater Owners (NATO) has yet to take an official position on the 2021 minimum wage increases. According to Variety, NATO has opposed minimum wage increases in the past. “While theater owners and operators praise efforts to improve living standards for all Americans, NATO believes that applying a universal wage increase to economically disparate regions would stifle both the nation’s economic growth and job prospects for first-time workers, “the organization said. in 2014.
As for the big chains like Cinemark, AMC Theaters and Regal Cinemas, they are believed to be in a better position. However, that does not mean that they have not complained about the increase in wages over the years. Although the larger chains have more resources, they are likely to result in automated ticket sales as a way to save money on labor. As a result of the increase in the minimum wage, theaters will most likely have to raise their prices, although they are limited by how high they can currently charge. With prices rising, theater owners are concerned that many viewers are simply staying home and streaming their entertainment. Variety was the first to report on movie theaters and the effect of increasing the federal minimum wage.
Topics: Movie Theaters