…But concessions workers said they worried Airmall’s business model — which required operators to keep prices the same as prices of street locations — pressured tenants to cut corners at the expense of their staff.
Employees, unions have criticized concessions firm
By Jenny Hottle, Daily Record Business Writer
Wednesday, June 2, 2014
Originally posted on thedailyrecord.com
Concessions workers at Baltimore-Washington International Thurgood Marshall Airport for more than a year and a half have called on airport concessions developer Airmall to increase what employees believe are low wages.
But a survey commissioned by Airmall found that the airport’s hourly concessions workers earn higher wages than workers doing the same types of jobs outside the airport, the company says.
Food and beverage hourly employees on average earned $11.62 per hour at BWI in 2013, according to the survey, compared to the Bureau of Labor Statistics’ average wage of $8.67 per hour for Maryland in that industry. BWI retail employers earned $11.71, more than the BLS average of $8.86 per hour for the state.
Airmall ordered the survey to gain a better understanding of anecdotal concerns about pay and compensation, said Brett Kelly, vice president of Airmall at BWI. The firm has faced criticism from state officials, including Gov. Martin O’Malley, who in July 2013 said Airmall has not done enough to improve working conditions.
Airmall, which leases spaces in the airport to individual operators, does not set wages or benefit levels. But concessions workers said they worried Airmall’s business model — which required operators to keep prices the same as prices of street locations — pressured tenants to cut corners at the expense of their staff.
“The only way to move past this was to do something like this study,” Kelly said. “We wanted to be able to represent faithfully and honestly what the jobs look like here to our client, the state.”
Annapolis-based third-party consulting firm The Minor Group conducted the survey and obtained data from each of the 43 businesses that operate 95 shops and stores in the airport. On average, concessions workers earned $12.49 per hour. The 1,144 hourly, non-managerial employees earned an average of $11.64 per hour and the 241 salaried employees earned $20.28 per hour, according to the survey.
Those figures compare “favorably” to the state’s $10.10 minimum wage increase effective in July 2018, Kelly said.
But some workers at the airport said they are unconvinced by the survey.
“I’d love to live in that world,” said Betty Schueler, a server at Phillips Seafood. “But that’s just not what’s happening here.”
Schueler has worked at BWI since 1972. Over the years, her coworkers have grown increasingly worried about earning enough income.
Hospitality union Unite Here Local 7 surveyed 180 non-managerial concessions workers in December and January and reported that non-tipped workers earned on average $9.01 per hour. Tipped workers earned $6.46 per hour.
And even though the average wage of surveyed workers increased between 2011 and 2013, the real median wage declined 3.3 percent after factoring in inflation, Unite Here said.
The union sent a statement in response to interview requests.
“We are disappointed that Airmall has chosen to contradict the workers who are the very backbone of its concessions program at BWI, and urge the company instead to work with the State of Maryland, the MAA, and its contracted concessionaires to address their concerns,” Unite Here said. “Only then will BWI truly be the ‘economic engine’ it is touted to be.”
The Maryland Aviation Administration, which owns and operates BWI, hired Airmall USA to manage and develop the airport in 2004. Since then, the number of food and retail workers has increased from 500 to 1,385. More than 17 percent of workers hold management positions, up from 3.2 percent in 2004.
Before Airmall, a single firm managed all the stores and hired employees directly. Under Airmall’s management, individual operators hire workers. In the past, BWI employees have said they worried Airmall’s street-pricing model affected employees’ wages or hours.
“They’ve created this atmosphere that’s made these jobs lousy jobs,” Schueler said. “It’s a race to the bottom.”
Airmall’s survey compared five businesses that had locations inside and outside the airport. Officials said results showed that BWI employees earned nearly $1 more per hour on average that those working outside the airport.
“If prices are similar to the region and wages on the whole are incrementally higher than the region, a fair question seems to be, ‘Where’s the issue?’” Kelly said.
Sandy Roberts, operator of Pinkberry and Onsite News at BWI, said he understands employee concerns about rent costs and profits. But airports have higher traffic, he said, which boosts profits. About 22 million passengers passed through BWI in 2013.
“We’re in five airports now, and they all have street-pricing models,” Roberts said of Pinkberry. “That’s nothing new.”
Roberts said he has not heard any complaints about wages from his employees. He said his employees get a raise every year.
But airport wages aren’t enough, Schueler said.
According to Unite Here, one in three surveyed workers relies on food stamps.
All 43 tenant companies offer benefits, according to Airmall officials. Unite Here said 84 percent of surveyed workers did not receive insurance through their employer, and 10 percent reported that they received paid sick days.
Schueler said workers can’t afford to opt in to the benefits.
The Airmall survey did not look at what benefits individual employees receive, Kelly said. But it calculated the average base wage for hourly employees, pro rata health and retirement benefits and paid time-off benefits. The average BWI wage, including benefits, exceeded the state’s designated living wage by $1.66 an hour, the survey found.
“There’s a range of jobs that have a range of compensation that companies deem appropriate for the job role and responsibilities,” Kelly said. “We don’t have a say in that. But what the study illustrates is it’s — simply understanding there’s going to be a range — incrementally better.”
In fall 2013, Airmall brought in HealthCare Access Maryland representatives to help employees sign up for the state’s health insurance exchange. The company also launched a series of free employee development programs, including English as a Second Language, ServSafe certification and GED preparation classes.
“We do not have a relationship with the employees where we can change their wages,” Kelly said. “But wanting to be responsible stewards of our contract with the state, we search for ways that are appropriate for our role to participate in that discussion.”