Croupiers at Macau’s Grand Emperor casino went on strike briefly this month and won an annual bonus twice as large as what management was offering.
“We believe the dealers struck for about one hour on Friday (January 24) and another hour on Saturday (January 25),” said investment analysts Union Gaming Research Macau. “They were threatening to strike again when a deal was reached.”
The new agreement with the casino, which is independently owned and operated as a sub-licensee of SJM Holdings, calls for a bonus equal to two months’ salary. Management previously had offered one month, according to UGRM.
Annual bonuses are customary in the local gaming industry and are calculated in terms of a lump sum rather than as a percentage of annual pay as in the US.
It’s not known what the impact of the job action will be, but UGRM suggests it “could result in a growing chorus for higher wages and bonuses throughout the industry”. Sands China, for one, announced today that it would pay bonuses in early February to all full-time employees. UGRM, however, discounted rumors that an industry-wide solidarity strike was being planned.
Macau’s dealers are in a position to exercise considerable leverage with the six casino concessions when it comes to pay and working conditions. Not only is the market the largest in the world and immensely profitable but labor is in critically short supply citywide—total unemployment runs at under 2 percent—and government policy prohibits the concessions from employing foreign labor on the games.
New research by Morgan Stanley estimates that the six megaresorts coming to Cotai in the next three to four years will require more than 30,000 new dealers and hotel staff which the available labor pool will not be able to fill. The firm forecasts the deficit will amount to more than 13,000 positions.
“There could be a sustained period of labor-related issues,” Union Gaming says. “This is likely to put upward pressure on wages, which should largely go unseen on the P&Ls of the resorts, but could be problematic for [small and medium-sized businesses] who are competing for these same employees and don’t have the wiggle room for what could be a materially higher cost of labor.”
The government had identified both labor and land shortages as factors that could hinder Macau’s growth. But allowing companies to hire more migrant workers, which could alleviate the pressure in the short run, but it presents political problems that make it difficult to effect quickly.
“Hiring more imported workers will surely put more upward pressure on the property market and consequently the inflation level, worsening the public mood,” said Chang Chak Io, vice president of the Macau Association of Economic Sciences.
The mere mention of the idea of the government considering allowing migrant workers to do jobs now reserved for Macau permanent residents drew thousands of protesters onto the streets on two occasions in October.
Gross domestic product grew 10.5 percent in the first nine months of last year, official data show, and the Monetary Authority that rate is sustainable, although the pace may slow down in the second half.
The University of Macau’s department of economics predicts GDP growth this year 9.1 percent. The Bank of China Macau Youth Association forecasts 9.43 percent.
The Monetary Authority says consumer price inflation is likely to stay above 5 percent and that the unemployment rate is likely to stay below 2 percent.
