Richmond Grand's average wages close to state's planned minimum, data suggests
Richmond and the companies hoping to bring a casino to the city have an agreement. The casino will hire at least 1,300 people and compensate them at an average of $55,000 per year.
But data from government and private industry indicates those average wages would be closer to the state’s planned minimum wage than Richmond’s average wage, especially if the jobs also include benefits such as health care.
Marshall Vance, an accounting professor at Virginia Tech who studies labor economics and human resources, said the best way to deduce an average wage was to compare the publicized average compensation to data from the Bureau of Labor Statistics on non-wage benefits.
In June 2021 BLS data, unionized workers in service industry jobs received 61.4% of their total compensation in wages — or $16.23 when compared against the $55,000 figure, if they worked full time with paid holidays and sick leave. Unionized workers typically earn more than non-union workers.
Michael Kelly — a spokesperson for Churchill Downs, one of the companies behind the casino proposal — says 31% percent of the workforce at a similar facility owned by the company worked in gaming operations. The company’s del Lago Resort & Casino — near Waterloo, New York — employed 23% in food and beverage.
According to BLS statistics, Gambling Service Workers make a median hourly wage of $16.28. Food Service Workers in Casinos make a mean wage of $16.01, but a median hourly wage of $15.26.
While these figures are national, Richmond’s mean wage in May 2022 was $28.88 — 3% below the nationwide average.
The $55,000 figure is also listed as an “average,” which could be measured as median or mean, but each produces a different result. Kelly didn’t say which of those measures was being used by Churchill Downs.
“As an academic, I tend to be skeptical,” said Vance, while noting he did not know the specifics of the casino case. “I would expect that they're probably giving you the average number, meaning taking all employees compensation and benefits and divide that by the number of employees. Because that will be skewed by high-earning employees.”
Virginia’s $12 hourly minimum wage, while subject to reapproval by legislators, is set to increase to $15 an hour in 2026. A handful of Republicans joined Democrats and voted to increase the minimum wage in 2020.
The agreement between Richmond and the casino developers does allow the city to conduct audits of the casino’s financial records and requires it to provide quarterly reports on employment.
City spokesperson Petula Burks did not answer a question regarding whether there was an enforcement mechanism for job promises outlined in the Host Community Agreement in her response to VPM News.
Kelly said that the $55,000 average wage was a floor for average compensation.
“It’s useful to think of the unions of being something like third-party enforcement of wage commitments,” he told VPM News. “Practically speaking, and based on the experience of other venues, there will likely be higher wage and benefits.”
The $55,000 figure was also in the host agreement from 2021, when a similar casino referendum was voted down. (Urban One worked on that agreement, but Churchill Downs did not.) Since then, U.S. wages and compensation have increased, according to the BLS. Inflation has also, and the city did not appear to renegotiate the Host Community Agreement.
Unite Here, a national union of hospitality and service workers, signed a Labor Peace Agreement with the developers Urban One and Churchill Downs. The labor group declined to share the text of that agreement, but a spokesperson said LPAs “ensure workers can organize without threat or intimidation.”
Benjy Cannon, a spokesperson for Unite Here Local 25, pointed to higher wages negotiated by its members at MGM National Harbor in Maryland when compared to online postings for jobs at Maryland LIVE! in Anne Arundel County (Unite Here does not have a contract with Maryland LIVE!).
Cannon wrote in an email to VPM News that the employer pays 99% of health care costs, the MGM contract has workplace protections from terminations and workers have a pension, among other benefits.
Someone with family health care making $24 an hour in wages has a compensation package equivalent to over $40 an hour, Cannon wrote.
If the union negotiated a similar deal in Richmond, that would mean roughly 60% of compensation is pay. This would make $15.87 an hour the agreed-upon average wage for workers at the proposed Richmond casino.
While a subsidiary of Churchill Downs recently lost a judgment in litigation regarding an agreement in Kentucky with the Laborers’ International Union of North America, the union has supported the project in Richmond. It came after LIUNA argued that Churchill Downs Racing violated a collective bargaining agreement by subcontracting services rather than using bargaining unit employees.
Unite Here has thrown significant manpower and resources behind the political effort to bring the casino to Richmond.
Other data points to a similar portion of compensation being paid out as wages.
The average yearly health care premium for a family in the commonwealth in 2021 was $21,348, according to a study paid for by the Virginia Hospital & Healthcare Association. When deducted from the advertised average compensation, that comes out to an hourly wage of $16.18 based on a $55,000 compensation package.