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Mike Wood talks on issues facing the business
Government trying to impose large wage hike

10/11/2011

By Don Muret

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Efficiency is the name of the game in the carnival business, according to Michael Wood, owner/operator of Wood Entertainment Co. In many instances, there is a lack of it, which can hurt both the shows and the events they play, Wood said. Wood Entertainment, an independent operation with seven attractions, plays five of the 10 biggest fairs in North America, including the State Fair of Texas. A few days before the Dallas event kicked off Sept. 30, Wood discussed several issues affecting the industry. Top of mind were labor-related concerns: the amount of time carnivals must be open to assist fairs in turning a profit; and a potential increase in the wages paid to non-skilled international workers under the H2B Visa program. On Sept. 30, the U.S. Department of Labor was set to increase the prevailing wage for those workers across the board an average of $4 an hour, a move that could hike some carnivals' labor costs as high as 50 percent, Wood said. The Outdoor Amusement Business Association, a carnival trade organization, filed suit to stop the arbitrary wage increase Sept. 7 in a federal court in Louisiana. After learning of the OABA suit, and a second suit filed by a group representing the landscaping industry, the Department of Labor suspended the increase for 60 days until Nov. 30, according to an email distributed by the OABA to many of the 120-plus carnivals using international workers. OABA officials believe the federal government took that action to give it time to mount a defense before the matter is resolved in court. Whether or not the wage hike takes effect is not known at this time, but the OABA estimates a savings of $16 million to $21 million annually without the increase. Some of the biggest carnivals in North America such as Ray Cammack Shows, Butler Amusements, Reithoffer Shows and Wade Shows use hundreds of international workers, Wood said. "Imagine if you had 300 [internationals] and when the clock strikes midnight on Sept. 30, their wages went up $4 an hour," Wood. "That's what would have happened." Wood Entertainment employs 24 international workers, a much smaller number compared with the larger carnival operators. But there is are several reasons why, for seven years running, Wood brings over two-dozen people from South Africa, They are dependable, they don't have bad habits and the fairs' guest relations booths get fewer complaints about the internationals compared with American workers. "We have to recruit them because in many cases domestic labor is not available," he said. "They have been excellent for our image, and let's face it, the mobile amusment industry has an image problem." Wood Entertainment pays all its seasonal workers $8.74 an hour, the highest prevailing wage set by the Department of Labor for all locations booking the company's rides. Paying the same wage for international and domestic employees keeps it simple, avoiding confusion for carnival staff, Wood said. Department of Labor approval of the proposed wage hike could lead to issues with U.S. born employees viewing the measure as a discriminatory practice, Wood said. It could also create tension between carnivals and fairs over the need for traveling amusement companies to adjust their contracts to cover the increased cost of labor. "The price of labor has caught up with us ... due to the crazy deals we make with the fairs, giving them all the money," he said. "With the new wage rules, we are accountable for all that time we require now to make our money. We need to go to our partners [the fairs] and do what we can to be more efficient, so there is a net profit, so we can re-invest in our operations and hire more people. We need to change our act." Case in point: the State Fair of Texas, an event Wood Entertainment has played for many years. Every year on Columbus Day, one of the fair's biggest days for business, officials can depend on an average midway gross of $1 million. The number reflects 15 hours of operation from 9 a.m. to midnight. Wood believes the same seven-figure benchmark could be achieved by cutting those hours of operation to 10 or less. The same holds true at the Minnesota State Fair. In 2008, Wood completed a study of ride operations in St. Paul after getting the OK from Jim Sinclair, the fair's deputy general manager. After "putting the clock" on rides and operators, Wood determined that at full capacity, the midway could gross $1 million a day over the fair's 12 days. "Yet we were doing $3.3 million total, using 31 percent of capacity," Wood said. One year later, due to some ride operators' scheduling conflicts, Minnesota ended up with about a half-dozen fewer rides and the gross was about the same as it was the year before with a greater number of attractions. As a result, everybody left St. Paul with more money in their pockets. "We need to get the business back to where it's sound again and the only way to do it is to cut back, get lean and mean," Wood said. "Some of these changes have been getting traction but it hasn't gone to where it needs to be. The fair gets the same amount of money, and that's what makes this labor issue such a critical hurdle to overcome."

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