With the announcement that California and New York will substantially raise the minimum wage over a five-year span beginning in 2017, the golf course industry is left to wonder what the effect will be.
There are theories on what upping the pay of lower-tier workers at such a drastic rate will mean, but no one has a definitive answer.
“It’s never been done. There’s nothing to compare it to, that’s the problem,” said Jeff Jensen, Southwest field staff regional representative for the Golf Course Superintendents Association of America (GCSAA).
California, which has one of the highest minimum wages in the country at $10, will raise it to $10.50 in 2017, $11 in 2018 and a dollar each year until 2022 when it reaches $15 an hour.
New York is more complicated. The minimum wage will gradually increase to $15 an hour on Dec. 31, 2018, in New York City and to $15 an hour on Dec. 31, 2021, in Nassau and Suffolk counties on Long Island and Westchester County that borders southwestern Connecticut. In upstate New York, the minimum wage will gradually increase to $12.50 on Dec. 31, 2020, with the increase to $15 an hour determined by a schedule to be set by the governor’s budget director.
The thought among many in golf is that highend facilities in sound financial shape will be able to absorb the increase, especially those that pay employees extremely well.
“Issues might be in poorer areas of the state [California],” said Jensen, who is concerned that facilities like mom-and-pop nine-hole courses may not survive. “This is going to be very, very difficult.”
Jim Ferrin is superintendent at Timber Creek Golf Course, which has an 18-hole and a ninehole layout and is part of a 55-and-older active community in Roseville, California, northeast of Sacramento.
In 2015, Ferrin, who has been superintendent at the facility for 10 years, was put in charge of landscaping. He has 22 staff members for golf and nine for landscaping.
“We already started looking at the $15 rate so I eliminated all seasonal employees,” he said, adding that he increased the pay of his remaining workers.
“I’m happy I did what I did, and my staff is happy. They have to do more but that is OK with them,” Ferrin said. “We’re happy as a facility to pay more of a living in wage.”
At Stafford Country Club in Batavia, New York, between Buffalo and Rochester, superintendent Peter Cavanaugh is not overly worried about the minimum wage rising, but knows his and other clubs could be facing financial strain if membership were to decrease or the economy take a significant downturn. Conversely, an uptick in the economy or an increase in membership will make the transition much easier.
“I’ve always paid my people more than minimum wage to begin with,” he said, explaining that doing so is a way to get quality staff. “It’s a lot of physical work. You don’t want to have people walking in and walking out in a week.”
The increase in minimum wage also means the ripple effect to every other employee. For Cavanaugh, some of his crew will be making $20 or more.
His board has already budgeted for the increases.
Cavanaugh knows that not every club is in his fortunate position.
“A buddy of mine [a superintendent] is back to mowing greens because he had to,” Cavanaugh said. “Some clubs have unionized.”
Jensen said in an effort to minimize the negative effect that $15 an hour might have on some facilities, the GCSAA suggested basing the minimum wage on the 1968 minimum wage rate of $1.60 an hour when the purchasing power of that mark was the highest it’s been in the last 50-plus years. That rate would translate to $11.30 in today’s dollar and then rise according to the consumer price index, Jensen said.
“We’re not opposed to people making a living wage, but we have to protect our interest,” Jensen said.
Many studies on the expected impact that increases will have skewer toward the positive.
According to a recent article in “The Week” magazine, economists from University of California – Berkeley see benefits for California based on studies of New York.
According to “The Week,” it would mean a 23.4 percent increase in wages for 3.16 million workers, and according to the study, “This improvement in living standards would greatly outweigh the small effect on employment. And the increase in wages would help reverse decades of wage declines for low-paid workers.”
There are other positives.
“For one, paying workers more reduces turnover (they leave for better pay less often) and improves worker morale. This increases productivity and saves employers money… employers tend to avoid allowing wage hikes to eat into profits — they’re much more likely to just hike prices.”
The fact is, though, that the minimum wage increase is a foregone conclusion, whether the effects turn out to be positive or negative.
“We’re going to have to figure out a way as an industry how we’re going to absorb these costs,” Jensen said.