Automation Central to Union Demands, Strike in Las Vegas

Las Vegas union workers are set to go on strike, and sitting atop their list of demands is an old favorite of tech pros: automation.

Culinary Union Local 226 is a Las Vegas-based culinary and bartender’s union with 25,000 members. They’re central to a multi-union fight for a new contract, as the last one expired on June 1, 2018. According to the union, over 50,000 workers in Las Vegas are covered by this contract, encompassing roles such as guest room attendant and bellman in addition to various culinary or food service jobs.

Though local to Las Vegas, Culinary Union Local 226 is part of a bigger organization, UNITE HERE. It covers over 250,000 workers in the United States and Canada, and is focused on hospitality and gaming employees.

The union contract spans 34 casino resorts in Las Vegas, such as MGM Resorts International and Caesars Entertainment Corporation. NBC reports the strike could cost city casinos $10 million per day. In 1984, the union went on strike for 67 days, which it says “crippled” the casino hospitality industry in the city.

“It is difficult to gauge the potential impact of a large-scale strike in Las Vegas since we haven’t had one since 1984, but we think a strike now would significantly impact MGM and Caesars’ operations on the Strip,” said Ken Liu, a UNITE HERE analyst. “With lower revenues and reduced operating margins, we believe a month-long strike could cut Caesars’ EBITDAR by about $115 million and lower MGM’s EBITDA by just over $200 million.”

A core argument for union employees is opposition to automation. “We support innovations that improve jobs, but we oppose automation when it only destroys jobs,” said Geoconda Argüello-Kline, Secretary-Treasurer for the Culinary Union. “Our industry must innovate without losing the human touch. That’s why employers should work with us to stay strong, fair, and competitive.”

“I voted yes to go on strike to ensure my job isn’t outsourced to a robot,” Chad Neanover, a prep cook at the Margaritaville, a Caesars Entertainment property, said. “We know technology is coming, but workers shouldn’t be pushed out or left behind. Casino companies should ensure that technology is harnessed to improve the quality and safety in the workplace, not as a way to completely eliminate our jobs.”

Robots may steal jobs.

 

Some 99 percent of the union’s membership voted to strike if a new five-year deal could not be met by June 1. “A strike is a last resort. We want to come to an agreement, but the union and workers are preparing for a citywide strike if contracts are not settled,” said Argüello-Kline.

Culinary Union Local 226 insists it wants what unions always want: better wages, better benefits, a more manageable workload, and security for its members in the event a property is sold. Where things get fuzzy is with automation. The only line-item on the group’s bargaining sheet addressing automation is “language regarding increased technology & the effects automation has on jobs and workers.”

The group hasn’t cited specific concerns when it comes to automation or artificial intelligence (A.I.). A recent study from the Institute for Spatial Economic Analysis (ISEA) says Las Vegas is low-hanging fruit for robots, though; it estimates 65.2 percent of jobs in the city can be automated.

“The replacement of jobs by machines has been happening continuously since the Industrial Revolution, but it’s expected to significantly accelerate in the coming 10 or 20 years,” according to Professor Johannes Moenius, founding director of ISEA. “Pretty much everyone will be affected, but some metropolitan areas will see a lot more jobs vanish than others.”

The union may be kicking a can down the road. It wants a five-year deal, but studies like ISEA’s show automation will be most impactful in a decade or more. The study also suggests that, while low-wage jobs are most at-risk, the effect on employment will be more drastic than the effect on wages.

Neither Culinary Union Local 226 nor UNITE HERE are asking that their membership be re-trained for new roles focused on automation. With at least one study showing Las Vegas is at risk for job losses due to automation, and fear within the union brass and its membership that automation will take jobs from humans, that seems a potentially more grounded demand. Unions in Las Vegas have a chance to set a precedent, and they’re not taking it.

“This looks like especially tough times ahead for Vegas,” added Professor Moenius. “But even though there may be a few winners, pretty much every region in the U.S. is going to get a hair-cut.”

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