Obama: Even the Best Job on Earth Deserves a Better Minimum Wage
The president wants to fatten the paychecks of people working on federal lands. The question is: Can he do it without putting public land tourism out of business?
Among the canon of raft-guide jokes about bad tips, itinerant living, and clueless clients, one enduring chestnut goes like this:
Q: What’s the difference between a guide and a savings bond?
A: The bond eventually matures and makes money.
But thanks to a 2014 executive order now gradually going into effect, more itinerant guides and workers in national park concessions may soon be getting a fatter paycheck.
In his 2014 State of the Union address, President Obama called on Congress to increase the federal minimum wage to $10.10 per hour from $7.25. “Say yes. Give America a raise,” he encouraged the new Republican majorities. The request was a nonstarter, so a couple of weeks later he issued an executive order requiring all companies doing business with the federal government to pay their workers at least $10.10 per hour as a condition of any new or renewing “contracts, contract-like instruments, and solicitations.” That language is intentionally wide-reaching—“to the extent permitted by law”—and it applies not just to companies like McDonald’s that operate on military bases, but also to privately run gift shops, hotels, and outfitters that operate in our national forests, national parks, and BLM lands.
While some guiding companies take people climbing, biking, hunting, fishing, and floating on state and county property, the most sought-after trips are typically in areas under the control of the Forest Service, the National Park Service, and the Bureau of Land Management. Additionally, many ski resorts sit on national forest land.
“Nobody’s upset that they’re getting paid more. But you know, the reality is, in our industry, it’s a certain amount about the lifestyle.”
Any contract submitted for renewal after January 1, 2015, will likely include language that requires the company to pay its workers and subcontractors at least $10.10 per hour. Permit and concession holders on Denali, the Grand Teton, Rainier, in the Boundary Waters, and the Middle Fork of the Salmon would all be subject to the new contract language when their permits renew. In Rocky Mountain National Park, that includes up to six new climbing concessions that will become available for outfitters to bid on starting this week. “Commercial operators that are interested in applying for one of the guiding service permits in the park will need to adhere to the new minimum wage requirement,” Kyle Patterson, Rocky Mountain’s public information officer, told me. In the prospectus released to would-be concessionaires on Monday, July 6, the draft contract indeed states, “The concessionaire will comply with all provisions of Executive Order 13658.”
For many concessionaires, the appearance of this language in their contracts is the first they’ve heard of the executive order. One such outfitter is Jack Wise, whose Wildwater rafting company operates on the wild and scenic section of Georgia’s Chattooga River, among several other southeastern waterways.
“We got an email from the local Forest Service folks saying that our permits were gonna renew,” says Wise. “And there was gonna be the new $10.10 minimum wage applied.”
Wise runs trips on four rivers, but only his federal Chattooga permit is subject to the wage hike. He’d already published his prices and hired staff for the season, and he briefly considered throwing in the towel. Now everyone in his Chattooga operation, from first-year guides to dishwashers to shuttle drivers, will make $10.10, while those working on the Ocoee and Pigeon Rivers will still make their previous salary, in many cases the current $7.25 federal minimum wage.
“We were given the choice of not opening our business and not fulfilling the reservation of our clients, essentially going out of business at one of our locations, or signing the permits with the $10.10 requirement,” says Wise. “Nobody’s upset that they’re getting paid more—that’s certainly the truth. But you know, the reality is, in our industry—as in most outdoor guided industries, whether it’s climbing or cycling or whitewater rafting—it’s a certain amount about the lifestyle. The people who tend to be guides, whitewater guides, rock-climbing guides are into the pure enjoyment of taking people outdoors.”
So how do you convert pure enjoyment into a rent check? Most guides get paid day rates for outings that can vary widely in duration. Experienced fly-fishing guides often make upwards of $400 per day, while top wilderness river guides earn about $150. As for alpine guides, says Adrian Ballinger, the owner of Lake Tahoe–based Alpenglow Expeditions, which focuses primarily on international climbs, “It would be unusual for an IFMGA guide, one certified by International Federation of Mountain Guides, to accept less than $200 a day. For an eight-hour day, this works out to a solid hourly. Of course, for an 18-hour alpine day, things start to look and feel a bit different.”
Figuring out when somebody is on the clock and when they’re not—even if they’re still on call—can be daunting. Most guides also make gratuities. “The minimum wage issue is not as large as some of the other compliance problems,” says David Brown, head of the America Outdoors Association, the group that lobbies on behalf of outfitters. In other words, companies that have previously elected not to keep track of things like gratuities, meals, leftover guide fridges, and that rent-free warehouse futon under the $7.25 minimum wage may now be scrambling to valuate those things to abide by the new $10.10 wage.
“The problem for a lot of these people is they’re not members of our association. They don’t know that the [new minimum wage requirement] is coming,” says Brown.
One baggage boatman, who asked not to be identified for this story, said, “Considering it would cost me $1,200 to do a private Grand Canyon trip, baggage boating is a great way for me to experience the canyon.”
Nowhere will this be this trickier than on the Grand Canyon, where guides can spend up to 17 days on the river. In addition to rowing passengers safely downriver, they serve as cooks, medics, naturalists, geologists, and often psychologists.
All 16 commercial outfitter permits on the Grand Canyon will roll over on January 1, 2018. John Dillon, head of the Grand Canyon River Outfitters Association, is worried about how Grand Canyon guides might be compensated on an hourly basis and how overtime would work for people who are on call 24 hours per day.
“You know, a 40-hour week versus 56 hours … and then is there compensation recording for gratuities,” says Dillon. Obviously, outfitters would prefer not to pay their employees for time when they’re asleep. “There are also concerns or questions about in-kind compensation, such as housing, transportation, and meals.” A cagey guide can live almost entirely rent-free, sleeping in the warehouse and eating well on the leftover food that comes back from river trips.
Outfitters in the Grand Canyon have never had to advertise for job openings, which are fiercely competitive and require a multiyear apprenticeship process. Company owners say that bureaucracy, price caps on trips, and high overhead already make it hard to be profitable as a Grand Canyon outfitter. OARS, which has 34 Grand Canyon launch days allotted per year by the National Park Service and caps trips at 16 guests (with four guides rowing dories and three baggage boatmen rowing rafts), advertises Grand Canyon trips for $5,400. Adding that up comes out to just shy of $3 million in gross revenue. OARS owner George Wendt confirmed that back-of-the-napkin figure but says the company’s profits are significantly eroded by the franchise fee of up to 18 percent—basically a progressive gross-receipts tax—that the Park Service charges for using the river. “When all the costs get added up, there’s not a lot left over for the outfitters,” says Wendt.
In OARS’ case, that’s not even counting the potential cost of paying its Grand Canyon baggage boatmen, who worked for free until this year. “Most outfitters don’t pay them at all,” says Wendt. This isn’t necessarily a problem if you ask the baggage boatmen, who typically receive a cut of the tips, which often net out to more than $1,000 per guide in the canyon. One baggage boatman, who asked not to be identified for this story, justified it this way: “Considering it would cost me $1,200 to do a private Grand Canyon trip, baggage boating is a great way for me to experience the canyon.”
Typically, seasonal employees who live on the job—like firefighters and home health care workers—are exempt from the minimum hourly wage requirements of the 1938 Fair Labor Standards Act. So are seasonal recreational businesses. But getting a straight answer about who exactly the exemption covers turns out to be tricky.
Posing as an out-of-work bro in need of a ski patrol job or a summer rafting gig, I called the Albuquerque Federal Wage and Hour division of the U.S. Labor Department to find out whether a prospective employer could legally offer me a $50 day rate for an eight-hour day. (Their hold music features an amazing, un-Googleable labor-rights anthem that goes, “You’re trying to make a living, you’re out there every day … you’ve got rights, we can help.”)
When I reached a representative, she said, “I’m going to tell you that you could probably take the day rate.” That’s because of an exemption for seasonal amusement and recreational establishments. Any business that operates for seven months of the year or less or makes two-thirds of its income in less than half the year is exempt from minimum wage requirements. That exemption covers employees at most water parks and places like Six Flags.
Additional wage increases could be a double whammy for outfitters working on slim margins. Or it could mean that guides will soon be able to upgrade to Toyota Tacomas and Subaru Outbacks manufactured after the year 2000.
But the rules are a little more complicated for companies doing business on federal land. That’s because another exemption states that the seasonal minimum wage exemption “does not apply with respect to any employee … in a national park or a national forest, or on land in the National Wildlife Refuge System.” However, ski resorts are explicitly exempt from that second exemption. Got it?
Translated, this basically means that outfitters on federal land are already subject to minimum wage laws, whether at the old $7.25 per hour or the new $10.10. Even under the old regime, it means that if you’re a guide or baggage boatman or support crew on federal land who’s making less than $58 for eight-hour day trips, your company probably believes that it is covered by the exemption.
When contacted for clarification, the Department of Labor in Washington, DC, issued a written statement. “There is no general exclusion for seasonal workers under the Executive Order (EO),” spokesperson Jason Surbey emailed me. “In other words, seasonal workers—like all other workers—performing on or in connection with an EO-covered contract are generally entitled to the EO minimum wage if they are entitled to prevailing wages.”
The ski resort question is one of the thorniest. Ski resorts that shut down in summer are already exempt from minimum wage laws. But now that they keep their lifts and restaurants open all summer for bikers, hikers, and golfers, many are no longer seasonal businesses at all. One company that isn’t waiting around for legal clarity is Colorado-based Vail Resorts. For the coming winter, Vail has decided to forgo the debate entirely and pay all of its workers at least $10 per hour.
“This was an internal decision made completely under the premise of doing the right thing for our employees and remaining competitive as an employer,” says company spokesperson Russ Pecoraro.
In Congress, Utah Republican Chris Stewart recently introduced legislation that would give outfitters and national park concessionaires the same exemption as ski resorts. In an email, Allison Barker, Stewart’s communications director, confirmed, “The seasonal recreational workers that Rep. Stewart’s bill exempts have never had a previous exemption” to minimum wage laws. Stewart wants to change that. Testifying about the executive order before a congressional subcommittee in June, Stewart said, “This increase will force many outfitting businesses to either close or to cease operations on public lands or to operate with fewer workers.”
As with other recent fights over social issues, momentum for a wage increase only seems to be building. In late June, fresh off his string of Supreme Court victories, President Obama announced another administrative action that would make any salaried employee who earns less than about $50,000 per year eligible for time-and-a-half overtime. Without a package of exemptions, guides working 18-hour days would also be eligible for time-and-a-half overtime in addition to a minimum wage. It could be a double whammy for outfitters working on slim margins. Or it could mean that guides will soon be able to upgrade to Toyota Tacomas and Subaru Outbacks manufactured after the year 2000.
Wise, the outfitter on the Chattooga, just wants a level playing field. “I don’t want to come across as being against the minimum wage, because I believe everyone needs to make enough money to live,” he says. “I have no problem with that. But I do have a huge problem when we’re put at a competitive disadvantage, having to pay wages that are 25 percent higher than everybody else that’s in our competing industry.”