Airport Experience® News - Conference Issue 2025

Select Minimum Wage Increases Across the Country

Wages for airport workers are rising. The Airport Restaurant & Retail Association compiled some of the latest moves: • In December 2024, the Los Angeles City Council amended the City’s Living Wage Ordinance to raise the minimum wage for service workers at Los Angeles International Airport (LAX) to $22.50 an hour in 2025, followed by $2.50 increases each year until the minimum wage reaches $30 an hour in 2028. These rates represent an immediate 17% increase over the current living wage of $19.25; the ultimate increase: 56% in less than four years. • In September 2024, concession workers at Austin-Bergstrom International Airport agreed to a $25 an hour minimum wage to avert a strike. The minimum had been $20 since 2022. The new minimum wage exceeds the city’s living wage by more than 15%. • The Metropolitan Washington Airports Authority established a base wage rate of $16 in 2024 with an expected increase to $16.78 an hour this year. • The Port Authority of New York and New Jersey last month announced a cumulative $1.50 an hour increase in the minimum wage during 2025, another 75¢ an hour in 2026, and then annual CPI increases between 2027 and 2032, reaching no less than $25 in September 2032. • The City of SeaTac’s minimum wage increased from $19.06 to $19.71 an hour for workers in hospitality and transportation, including employees at Seattle-Tacoma International Airport . The wage is 21% higher than the state’s minimum wage standard of $16.28 .

either more automation or lower levels of service or prices so high that even someone on an expense account will refuse to pay them,” he says. “Generally, I cannot see concessionaires reducing their profit margins by much more, and the airports don’t make much either,” Gluck continues. I’ve talked with some clients about whether they feel that concessions may eventually become customer services, where the airport pays the vendors to be present at the airport. That’s taking things to an extreme, but it has already happened with Smarte Carts in many airports that want free carts for their international arrivals.” Something’s Gotta Give So, how does the industry move forward? ARRA’s report urges change. “If we don’t change the model, we will likely regress as an industry,” the report said. “Back to an era of limited offerings and generic concepts. As the industry moves into this critical period, the choices we together make today will shape not only the future of airport concessions but also the broader passenger experience for years to come.” In the short term, Weddig suggests rent relief and relaxed pricing controls as helpful measures. “In the longer term, there are many possibilities to change the business framework, but airports and concessionaires

“According to a recent ARRA member survey, 87 percent of members need up to 10 percent more employees than they currently have, and the other 13 percent need more than 10 percent, so no one is fully staffed,” he says. “Although turnover has subsided, it is still well above pre-Covid rates.” Even with labor availability improving since the height of the pandemic, labor costs “continue to rise at an alarming rate,” Bisset says. “The recent Olympic Wage in Los Angeles is particularly concerning, reflecting a 56-percent increase in labor costs over four years. This dramatic cost increase will render the business in Los Angeles financially unviable. Similar pressures, though less extreme, are being observed in many major markets across the U.S.” Weddig notes that 50 percent of ARRA members state that labor cost is

the most important challenge they face. “Members have seen associates’ hourly rates increase 59 percent over the past three years and total labor costs are up 30 percent since 2019.” Like Bisset, Weddig is very concerned about operators doing business in Los Angeles. “The city council recently approved minimum wage increases for airport workers – not city-wide; just the airport and hotels – that, for some ARRA members, will increase labor costs more than 70 percent over the next four years. No business can survive this kind of mandated cost increase without some kind of offset.” Alan Gluck, principal consultant for the global airports’ commercial service line at ICF , notes that for his primarily West Coast clients, labor is indeed a huge issue. “At $30 an hour for the cheapest labor, something is going to have to give:

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AX NEWS MARCH 2025