Movie theater owners are warning that the proposed federal minimum wage increase will be "disastrous." Business was destroyed in 2020, due to the public health crisis, which is still going on. As of this writing, over 60% of movie theaters in North America remain closed, though there is a light at the end of the tunnel. According to analysts, there is a good chance that theaters will be able to open by this summer, or the fall, which means that people will likely head back to see a new movie.
While the pandemic news is starting to get a little better for movie theaters, owners are warning of another massive challenge ahead. An increase of the federal minimum wage has been proposed by Congress, which has not happened since 2009. As it stands, the federal minimum wage sits at $7.25, and Democrats are pushing for $15 by 2025, which theater owners believe 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 compensate for that kind of increase and still expect people to patronize the business. It would be disastrous."
Movie theaters rely on part-time workers earning around $7.25 to keep their overhead low in order to maximize profits. However, some states have been raising local minimum wage over the years, which would also be affected by the federal increase. "I think it's a real disservice to the young, unskilled employee when we start pricing them out of the market," Russell Allen, president of Allen Theatres in Las Cruces, New Mexico said. "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 (NATO) has yet to take an official stance on the 2021 minimum wage increases. According to Variety, NATO has been opposed to minimum wage increases in the past. "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 organization said in 2014.
As for the large chains like Cinemark, AMC Theatres, and Regal Cinemas, it is believed that they are in a better position. However, that doesn't mean that they haven't complained about wages increasing over the years. Though the bigger chains have more resources, they will likely result to automated ticket selling as a way to save money on labor. As a result of the minimum wage increase, theaters will more than likely have to raise their prices, though they are constrained with how high they can currently charge. With prices climbing, theater owners are worried that many moviegoers will simply stay home and stream their entertainment. Variety was the first to report on movie theaters and the effect of the federal minimum wage increase.