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Rod Smith

Las Vegas Culinary Workers Get Wage Boost

27 May 2004

LAS VEGAS -- Culinary union members will soon see a substantial wage boost because of cost savings in the union's health plan that are being passed on in hourly pay increases, a union official said Wednesday.

D. Taylor, secretary-treasurer of Culinary Local 226, said the average wage of $12.20 for all casino union members will increase by 4.9 percent effective Tuesday.

"This shows the gaming companies can do well and workers can do well at the same time. That's part of the success of Las Vegas," he said.

Full-time union workers at most Strip properties get an increase of 60 cents an hour, or about $1,248 a year. Their downtown counterparts will get an increase of 25 cents an hour, or $520 a year, a mailing to union members said.

Taylor explained that the union has achieved significant savings in its health plan by setting up a free pharmacy that encourages the use of generic drugs and making needed changes in its doctor network.

"Rather than paying more to big pharmaceutical companies, those savings are going directly into our members' pockets," he said.

Taylor said these wage increases will inject $50 million into the Las Vegas economy while also letting union workers in the gaming industry improve their standard of living.

"This proves that if workers are compensated fairly, it benefits the companies, benefits the town and benefits the employees," he said.

University of Nevada, Las Vegas professor and casino industry expert Bill Thompson said passing the health savings to workers was particularly good for the local economy because much of the gaming industry's profits are shipped out of town in dividend and share repurchase programs.

"If it stays in Las Vegas, it's good for Las Vegas. And if the workers get it, it's good for morale and for the industry," he said.

The union and health care analysts have said the Culinary has the best medical plan in the state, with access to 1,800 doctors and local hospitals.

Nonunion health plans in Las Vegas usually require workers to pay premiums out for coverage, offer no coverage for part-time workers and provide more limited choices for medical care, Taylor said.

Paying individual premiums was a fundamental sticking point in previous contract negotiations, with the union winning the right to premium-free insurance from employers.

"This was a big issue a couple of years ago," said Eric Hausler, gaming analyst for Susquehanna Financial Group. "The arrangement is a good thing for the companies as long as the casinos don't have to pay for it. It's almost like a cash return."

Under the union's five-year collective bargaining contract ratified in 2002, each year the union decides how much of the increase in employer contributions can be allocated to wage increases compared with the union's health and pension plans.

Hausler said that raises a question about what happens in the future, and whether the arrangement might open the companies up to demands for higher wages if the savings don't hold up.

This year, 60 cents of the 65-cent increase for the Strip workers will be allocated to wage increases because of the health plan cost savings, with 1 cent allocated to the health plan and 4 cents going to the pension plan.

Since 1991, wages have been increased almost $4 a hour for union workers on the Strip and $3.70 for downtown workers, while they have continued to enjoy free health care for themselves and their families and an employer-paid pension plans.

The Culinary represents 50,000 housekeepers, food servers, cooks and other workers on the Strip and downtown.