Film-Tech Forum ARCHIVE: Price change due to min. wage increase

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Posted by Ramin Hashemi (Member # 2694) on 11-19-2007, 02:09 PM:

I know this topic has been discussed in detail. But mow that reality is here -

As of Jan1 min. wage in Ca, will be $8.00. For us, in reality, that means that everyone will get a $0.50 raise (even though almost everyone is well above minimum wage).

We are probably going to raise prices as of Christmas. Probably $0.25 on tickets, and some concession items.

Are you all raising prises, and when/how much?

thanks

Ramin

Posted by Peter David Bruce (Member # 4447) on 11-19-2007, 02:14 PM:

Ramin... didnt use to work for Cancom, per chance?

anywho... over the pond here in the UK we are looking at pushing up prices a bit over the xmas period. i suppose the premise is that people are more willing to spend money at xmas... and they wont notice the price changes in amongst all the crowds and general buzz of the holiday season...

or something like that. [Smile]

Posted by Kamil Jackson-Chaka (Member # 4316) on 11-19-2007, 02:47 PM:

all the prices at my theatre just went up 50 cents in preparation for Florida's minimum wage going up Jan 1st. Course there won't be any pay raises for those of us making more than minimum wage.

Posted by Mike Blakesley (Member # 26) on 11-19-2007, 03:09 PM:

Montana is currently at $6.15 and will go to $6.25 as of Jan. 1.

My policy is, all new hires stay at the minimum wage for a 90 day probationary period, after which they go up to $6.50 or $6.75 if they're doing really well. I haven't decided whether to bump everybody up a little, or just the new hires. Either way, I don't anticipate raising the prices.

Posted by Bruce Hansen (Member # 281) on 11-19-2007, 05:45 PM:

You must have one employee per customer in order for your price increases to be due to wage increases. If you take the wage increases and divide them by the number of customers, the cost per customer will be less that a penny each. Sounds like someone needs an excuse to raise prices.

Posted by Mike Blakesley (Member # 26) on 11-19-2007, 06:23 PM:

I would rather raise prices in response to a wage increase than almost any other reason. The general public doesn't know or care how much our utility bills have gone up, or how much our property taxes have increased, or how much extra film rent we paid to get that new blockbuster. But when you say, "It's because of the wage increase" they smile happily and say "Well, the kids deserve it."

But, as I said we don't plan an increase this time, even though it might be a good idea given gas prices.

Posted by Chad M Calpito (Member # 3736) on 11-19-2007, 06:30 PM:

Well, as far as the new company, Reading Cinemas that is in the process of finalizing the purchase of Pacific Theatres on December 13th or 14th, I don't know if they will increase the prices at the Box Office and at the Concessions due to the minimum wage increase effective next year and whether or not if they will do any kind of pay raises. More to come, if I receive word of the increases or when I see it.

Posted by Monte L Fullmer (Member # 2797) on 11-23-2007, 01:59 PM:

I've heard that large circuits with megascreen complexes don't really worry on what the min wage wars since as Bruce mentions the cost per person coming in the door is just pennies compared to the mega dollars made in Conc since the higher percentage is taken at the gate.

Plus, having megascreen complexes with small capacity houses, those movies that are so-so, or even tank horribly, it's really no be loss since the better movies makes up the slack. But still, the mgr really has to watch his budgets to keep the complex earning a profit.

..but, it's unfortunate in a way for the single screen owners who really need to have the blockbusters on his screen to make that same profit after the "house nut" has to be paid.. But, if that owner really knows how to market his theatre, still it's still gold in his pocket for sure.

Posted by Bobby Henderson (Member # 840) on 11-23-2007, 03:28 PM:

Minimum wage increases are one thing, one thing that seems to happen on a fairly rare basis. Workers comp insurance premiums on employees -now that's something that is getting more and more expensive all the time. Perhaps workers comp rates may not be all that bad for a movie theater (don't really know for sure). Our manufacturing business has seen its rates nearly triple during this decade.

I contend the rising costs of workers comp insurance is one of the biggest factors driving employers to hire illegal migrant workers or just pay anyone they can off of the books. There's lots of extra costs which come along for the ride when you hire an American citizen or legal immigrant and have that worker documented.

Utilities costs for movie theaters are expensive and will get even more expensive with oil nearing $100 per barrel and natural gas prices gaining. Those costs filter through to so many other areas.

Let's not forget about the declining value of the US dollar.

During the last few months the evening ticket price at the Carmike 8 went from $7.50 to $8.00 and now $8.50 as of 11/16.

Posted by Jack Ondracek (Member # 1466) on 11-23-2007, 07:47 PM:

quote: Bobby Henderson
.......... During the last few months the evening ticket price at the Carmike 8 went from $7.50 to $8.00 and now $8.50 as of 11/16.

Nahhhhhh.... that's because they now have to shell out big bucks every year on a couple of decent bulbs for each of those new digital projectors they have, rather than bleeding cheap ones 'til they explode! [Big Grin]

Posted by Dominic Espinosa (Member # 2122) on 11-25-2007, 08:49 AM:

Due to the fact that we currently have a multitude of positions over minimum wage in our theaters including a few folks we didn't lay off with the elimination of a useless position, the 1st of the year raises are going to be regulated by performance reviews.
Any employee who typically would be at minimum wage but received raises (several due to the old employee incentive program that was really just manager whim) will have to receive an evaluation that shows they are worth a continuation of elevated wage and may not have a documented disciplinary issue.

Posted by Martin Brooks (Member # 1269) on 12-02-2007, 11:09 AM:

If you have 10 minimum wage employees who are there 12 hours a day, 7 days a week, that's 840 hours. If the minimum wage is causing you to raise salaries by a dollar an hour (which isn't true in most cases), you've got to bring in another $840 a week.

If you have five theaters playing four shows a day, you need another $6 per show to break even. If you average 60 people per show, that's a 10 cent increase in ticket prices that you need and that's probably an extreme case. If you can get just two more people to visit your theaters for each show, you've more than paid for the wage increase.

In New York City, the minimum wage was $1.25 in 1966 and that wasn't so great even then. That's $8.06 today. If you're paying less, you haven't even kept up with inflation. Let's stop all the tears. Unless you think it's okay for the U.S. to become the equivalent of a third-world country, which, considering how little the dollar is now worth, we're quickly becoming.

Posted by Jack Ondracek (Member # 1466) on 12-02-2007, 11:25 AM:

quote: Martin Brooks
If the minimum wage is causing you to raise salaries by a dollar an hour (which isn't true in most cases), you've got to bring in another $840 a week.

Well... not exactly.
You have to add in the extra social security, unemployment and insurance taxes, as may apply in your state. The effect of a wage increase is commonly viewed at face value, but is always more expensive than it looks.

That extra $850 per week probably works out to around $5,000 per month, or $60,000 per year in its net effect... maybe more. For a lot of theatres, that's a big deal.

(edit) BTW... That $60k is after percentages to the film companies or concession product costs, so figure you have to bring in another $120,000+/yr to pay for that $1 wage increase.

[ 12-02-2007, 03:00 PM: Message edited by: Jack Ondracek ]

Posted by Monte L Fullmer (Member # 2797) on 12-04-2007, 12:52 PM:

..and what Jack mentions above is what is in the minds of discount theatre owners and operators.

As with us, we have two discounts as with fed min wage hitting $7.25/hr in 2009, these two theatres are going to have to bring in at least $60k more bucks/year through the door just to break even, or do some drastic hourly downscaling/budget cuts to stay alive if the gate and concession incomes doesn't increase.

Plus, with this, it could spell doom for the 2 buck houses by raising their tix prices to 3 and entering into the sub-run market (but who wants to give the film companies more money??).

-Monte

Posted by System Notices (Member # 2357) on 12-31-2008, 09:00 PM:

It has been 393 days since the last post.

Posted by David Stambaugh (Member # 1102) on 12-31-2008, 09:00 PM:

Oregon's minimum wage bumps from $7.95 to $8.40 on 1/1/09.

Posted by Monte L Fullmer (Member # 2797) on 01-01-2009, 01:51 PM:

? Any news on what Washington's min wage is going up since its neighbor below them shot up that high?

Posted by Kevin Fairchild (Member # 4985) on 01-02-2009, 12:30 AM:

quote: Monte L Fullmer
? Any news on what Washington's min wage is going up since its neighbor below them shot up that high?

Washington’s minimum wage increased to $8.55

Posted by Monte L Fullmer (Member # 2797) on 01-02-2009, 05:30 AM:

Makes one wonder how cinemas in these two marine coastal states are handling their payroll with level entry wages being that high?

What form of budget control do they have in able to keep profit margins in the black at all times - in good and bad times?

thx..Monte

Posted by Dominic Espinosa (Member # 2122) on 01-02-2009, 02:31 PM:

quote: Monte L Fullmer
What form of budget control do they have in able to keep profit margins in the black at all times - in good and bad times?

I believe the prices now are:
Matinee: Arm
Senior/Children: Leg
General: Arm & Leg

All kidding aside, I'd expect to see more combination positions. Assistant manager/projectionist, General manager/concession support, etc.

Just my thoughts...

Posted by Steve Guttag (Member # 268) on 01-02-2009, 06:40 PM:

Or raise the prices enough to cover the additional expense. Remember too, the folks making minimum wage coming to see the movies also likely got a raise too. All boats should rise with the tide.

The realities are, the increase in prices would be rather minimal to cover such an increase in payroll.

Posted by Ramin Hashemi (Member # 2694) on 01-28-2009, 05:34 PM:

A lot of comments are made about the minimal effect of minimum wage increase on bottom line. There are 2 things that are effected because of minimum wage increase.

1) Most wages have to increase to keep the incremental wage intact.

2) All other expenses, including concession cost, delivery cost, utilities, ect also get effected.

If not right away, shortly thereafter. We have all seen the increase in concession costs.

Posted by Jack Ondracek (Member # 1466) on 01-28-2009, 05:59 PM:

quote: Monte L Fullmer
Makes one wonder how cinemas in these two marine coastal states are handling their payroll with level entry wages being that high?

It's a good question, Monte, and the answer usually isn't what people expect.

Outside of our area, one would think our high minimum wage (highest in the nation) and 8 - 10% sales taxes on everything but admission tickets and most foods would stifle business. If you look at border towns, like between Washington and Idaho (where the minimum is much lower), you find that lots of people are coming over here to work... AND shop.

Dunno... cost of living is higher here, wages are higher here, you probably keep about as much as you would if you lived in a mid-west farming state.

Posted by Tristan Lane (Member # 1169) on 01-28-2009, 07:37 PM:

quote: Jack Ondracek
8 - 10% sales taxes on everything but admission tickets

John, are ticket sales exempt from sales tax??

Posted by Chris Slycord (Member # 4239) on 01-28-2009, 10:49 PM:

quote: Jack Ondracek
Dunno... cost of living is higher here, wages are higher here, you probably keep about as much as you would if you lived in a mid-west farming state.

Wages and costs may both be higher, but in many cases if one moves to an area that has a higher cost of living (including the Seattle area) the increase in wages doesn't completely compensate for the increase in living expenses.

For instance, my rent for a one-bedroom apartment is 35% of that of an old friend's apartment in Bellevue, yet our minimum wage is 85% of that of Washington State.

Posted by Monte L Fullmer (Member # 2797) on 01-28-2009, 11:33 PM:

quote: Jack Ondracek
you find that lots of people are coming over here to work... AND shop.

Only thing that stings on that one is that the people having to pay dbl state tax on their income taxes since they live in Idaho and work in Washington for that higher wage.

..like the people who live in the corner of Oregon (Ontario) and Idaho residents (where min wage is $6.55/hr now) wade across the Snake River to work in Oregon for that $8.40/hr wage they get and you know they gonna get stung with dbl state taxes at the end of the year.

So, here's a dumb one then: WHY do have increases in min wage if the cost of living raises then adjusts to the wage increase - where's the incentive of making money then?

Looks like someone, somebody doesn't want us to be successful and financially secure, do they?

Posted by Chris Slycord (Member # 4239) on 01-28-2009, 11:37 PM:

What do you mean by "double taxes"? In the sense that they have to pay state income tax twice? In that case, you have to remember that there is no state income tax in Washington.

Posted by Monte L Fullmer (Member # 2797) on 01-28-2009, 11:38 PM:

Not familiar with tax laws in Washington. Just guessing on that one. Thus, no wonder why people jump border on the I-90 corridor to work in that state..along with those down in Moscow/Pullman area..

Heard that one does with Oregon though...

In states that have no state tax, where do that state get their revenue then .. getting it somehow...

Posted by Chris Slycord (Member # 4239) on 01-29-2009, 12:45 AM:

High sales tax. When my parents moved to Washington, we were shocked that the sales tax was just about double what we had in NC.

It's the same kind of thing here in Texas. No income tax but fairly high sales tax.

Posted by Jeremy Weigel (Member # 4208) on 01-29-2009, 01:15 AM:

And property taxes...

Posted by Chad Souder (Member # 343) on 01-29-2009, 07:55 PM:

quote: Jack Ondracek
cost of living is higher here, wages are higher here, you probably keep about as much as you would if you lived in a mid-west farming state.

You've just done a nice job of summarizing the broad affect of a minimum wage.

quote: Chris Slycord
For instance, my rent for a one-bedroom apartment is 35% of that of an old friend's apartment in Bellevue, yet our minimum wage is 85% of that of Washington State.

Real estate is just one factor of many that contributes to cost of living. I'll bet your food, transportation and utilities are much closer. You are pointing out, however, why minimum wage is so counter-productive. A cost of an apartment may vary considerably neighborhood to neighborhood while a minimum wage is state-wide - or even more laughable, nation-wide. I'm going to guess that somewhere in Washington you could find a similar apartment for less than your Houston one, yet their minimum wage would still be higher. It just doesn't make sense.

Posted by Chris Slycord (Member # 4239) on 01-29-2009, 10:19 PM:

Actually, transportation tends to be lower here because of the oil companies.

Though if most things (like gas, food, etc) are about equal and housing is significantly more expensive, the difference in overall expenses is pretty significant. And you also have to consider that because housing is cheaper, other areas get cheaper as well.

Consider this:
I had gotten turned down at Bastyr University's acupuncture program (probably would've gotten in if I reapplied a year later) and I got accepted here in Houston at the American College of Acupuncture & Oriental Medicine. Bastyr's tuition alone was approximately $20,000 per year whereas I spent less than that total on tuition, rent, books, etc from my student loan. Both schools are just as well respected, yet the one I'm at is lots cheaper and it would be due to the housing difference between here and Seattle.