Country artist Tim McGraw performed a song called “Everybody Hates Me,” which talks about how workers love to hate the boss, but they are secretly jealous of the boss, and they all want to be the boss themselves. During my 22 years in Summit County, Vail Resorts has been the big boss company that locals love to blame for all sorts of problems: failure to provide enough employee housing, low wages, traffic, overcrowded slopes, etc.
I am not a Vail Resorts employee. I do not own any Vail Resorts stock. I am not an Epic Pass holder. I think Vail Resorts, like every other company, has its strengths and weaknesses. I am simply a neutral observer of Summit County economics and sociology, so please skip the personal accusation letters speculating about my allegiance to Vail Resorts.
Whatever you think of Vail Resorts, it set the minimum wage in Summit County. And two weeks ago, Vail Resorts announced it was going to set its starting wage for the 2022-23 ski season at $20 per hour. The higher starting wage is something that would seemingly draw widespread praise from its critics, but I have barely heard or read anything at all. This is a $5 per hour increase in starting salary in one year!
Vail Resorts is increasing wages because it was short staffed, like everybody else, this season, and that negatively impacted customer experience. This put pressure on management to improve. This is exactly how market economics are supposed to work. A company recognizes that low staffing and service levels are hurting its brand and business, so it raises wages to improve staffing levels, workforce morale and overall customer experience, which in turn makes more customers recommend the brand and return as repeat business in the future.
It is a good thing when the marketplace drives up wages, as opposed to government dictates. Whatever the motives, it is a beneficial situation for the business and its employees, and it drives up wages across the entire market segment. This is all well and good, but what does Vail Resorts’ action mean for Summit County businesses, residents and workers? What is the Summit County experience going to look like in the future now that Vail Resorts has done what many have been demanding?
In the short run, Copper Mountain Resort, Arapahoe Basin Ski Area and Loveland Ski Area will have to match Vail’s salary move, and so will every other hospitality-oriented local business. There will also be significant salary compression through at least the current $30 per hour salary range. If you were making $18 per hour this season, are you going to be happy with a $2 per hour raise? Of course not, you are going to want at least $23 per hour next year, but that is just status quo. It does not even keep up with the national inflation problem. Regardless, the marketplace will adjust.
If you are a local business that can increase wages and correspondingly raise the price of goods and services, you will. If you cannot absorb the increased cost of labor, you will cut workforce, services, hours, product offerings or all of the above to survive. If you cannot remain profitable while mitigating or offsetting the increased costs of operation, you will close your doors. This will result in the loss of more longtime local businesses like Wilderness Sports.
My point is not to be a downer. There is opportunity in every circumstance, and I will explore broader economic opportunity in subsequent columns. Over the next two to three years, expect to order a lot more from kiosks and mobile phone apps. Any jobs that can be automated will be automated. Don’t be surprised when a fast-food combination meal costs $12.95.
For incoming town council members, pay close attention to the health of your local, main street businesses. Look for ways to provide regulatory and tax relief that helps them cash-flow. For Summit County residents, commit to patronizing local businesses every time you can, even if it costs a little more. Jeff Bezos, and Amazon, will still be fabulously wealthy without your money.
Vail Resorts has raised the local hourly wage bar. The question is, how are we going to adjust to this positive move?
Bruce Butler’s column “Common Sense Conversations” publishes biweekly on Tuesdays in the Summit Daily News. Butler is a former mayor and council member in Silverthorne, where he has lived for 20 years. Contact him at firstname.lastname@example.org.