If Wilton Rancheria Casino Pays Wages Similar To Thunder Valley, Can Workers Afford a House in Elk Grove?

November 16, 2017 | 

Yesterday Thunder Valley Casino in South Placer County held a job fair. According to information posted on Twitter, that casino posted the advertisement shown above with the following wages.

  • Cook - $13.82 hour
  • Housekeeping - $11.72 hour
  • Beverage Server - $10.50 + Tips
  • Bartender - $10.50 hour + Tips
  • Valet - $10.50 + Tips
  • Kitchen Worker - $10.50 hour
  • Security Officer - $12.55 hour
  • Janitorial - $10.96 hour
  • Fast Food Cashier - $10.50 hour
If we are to believe Wilton Rancheria Tribal Chairman Raymond Hitchcock, construction on their proposed casino operation could start as soon as next year with an opening as soon as 2020. 

If Hitchcock’s timetable is correct and business is as expected, Elk Grove City Council members and a bevy of casino supporters have touted the operation could employ up to 2,000 people. If those numbers are accurate, and we are to use labor market economics, it is probably fair to say those employees will be paid roughly the same as their nearest major competitor, Thunder Valley.

Based on the prevailing wages paid at Thunder Valley, could two parents, particularly those just starting out, working full-time jobs at the Wilton Rancheria afford to buy a house in Elk Grove based on current market conditions. Let’s take a closer look.

For the sake of argument, we will say both parents are employed full-time with a complete benefits package offered by Boyd Gaming, the Wilton Rancheria’s financing partner. Furthermore, let’s say one of the partners is employed as either a cocktail server or bartender who makes higher wages when tips are included and the other as a cook, which has the second highest listed wage.

We will not include dealers in this analysis because those wages are not listed on the Thunder Valley advertisement. Furthermore, casinos are more interested in slot machines – the Wilton Rancheria state compact has approved up to 2,000 in their operation – as they make money quicker than most gaming tables, and require less labor.

First, let's look at the bartending or cocktail server income projection. Since tips are a significant portion of their wages, we will say their wages will more than slightly double. 

Based on $10.50 hour, this would double their hourly wage to $21.00 hour. Based on 2,080 hours a year, this would generate an income of $43,680.

Obviously, earnings from these cocktail-oriented jobs are variable based on shifts worked, and activity at the casino.

Now let’s say the other parent works as cook – the second highest wage listed - at $13.84 hour. Based on 2,080 hours a year, the net income for this position is $28,787.  

On a side note, a review of the multitude of jobs listed on Thunder Valley website shows many to be either part-time or on-call. Furthermore given the number of job fairs listed on Thunder Valley’s career Twitter page, that may be an indication many of the jobs at the casino experience high turnover rates and not career type positions.

Nonetheless, we’ll dismiss that aspect and take the words of the Elk Grove City Council, city officials, economic development specialists, tribal officials, Boyd Gaming, and various business interests’ that all 2,000 jobs promised for the Elk Grove casino will not experience high turnover rate typically found in the hospitality industry, and are in fact long-term positions where people will enjoy lifelong careers.   
Back to our casino parents, between their combined income, the estimated full-time annual earnings for this two-parent family would be $72,467. For the sake of argument – including overtime pay or more tips than estimated – let’s say their total combined net annual income is $80,000.

Can a two parent family, both of whom work at the Elk Grove casino, afford to live in the city where they work? For this answer we used Redfin.com’s How Much Can I Afford Calculator.

Entering the 95624 zip code – which is the middle ground of house values of Elk Grove’s three zip codes according to Zillow – and an annual household income of $80,000, and with a down payment of 20-percent - $58,400 – the recommended house price is $291,000 with a high estimate house $385,600.  

If the couple in our scenario has a lower down payment available to use, say 10-percent, the recommend price drops to $264,400 with $359,000 at the high end of the scale with down payment of  $26,500. Given the recent prices increases in Elk Grove, much of the existing housing market would be out of reach for these workers.

While data presented is subject to slight adjustments to things such as income and housing prices, it nonetheless brings us to the main point – will casino workers be able to afford housing in Elk Grove and if not, what should be done to accommodate this influx of 2,000 workers?   

As it stands right now, a young couple working full-time positions at the casino will unlikely be able to afford housing in Elk Grove from its existing stock. It is noteworthy that we specify young workers because an older working couple who has owned a house in Elk Grove for any length of time is likely to employed in better-paying jobs, say with the State of California, are unlikely to work for the casino. 

So if the 2,000 jobs are meant to improve Elk Grove’s well-documented jobs to homes imbalance, what happens if the workers for the jobs cannot afford to live here, much less purchase a house? The imbalance may improve but will any of the adverse effects of our current imbalance, like traffic and poor air quality, be mitigated?

Likewise, given this influx of 2,000 jobs, will Elk Grove, and more specifically many current homeowners, welcome a more substantial affordable housing component including options like high-density housing and multi-family complexes as part of the city's diversity?

This will be the real test of whether all the talk in Elk Grove about diversity and unity is real or just idle chatter. Does that diversity and unity extend to people of lower economic class hoping to live and own a home in a decent community near where they work? 

As noted earlier, if we are to believe Hitchcock and his group of gaming boosters, a casino in Elk Grove is the closest thing there is to a sure bet. In the time before the casino opens for its first lounge lizards and hustlers, the Elk Grove City Council faces many challenges integrating the casino into the city, not the least of which will be determining if there will opportunities for these workers to live, work, and play in Elk Grove, or just show that to be another banal slogan conjured up in the bowels of city hall. 

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D.J. Blutarsky said...

Your home affordability analysis for a two-parent household employed in the gaming industry is interesting, but....

The new homes being offered in Elk Grove appear to be tailored to the multi-generational, multi-cultural demographic (who prefer that type of living arrangement), with income sources being pooled from each generation living in the home. The home builders are designing homes that provide separate living quarters downstairs for an elderly parent(s), each presumably receiving Social Security payments; and a huge number of bedrooms to accommodate the wife/husband and their working children as well.

So, I see a scenario where Mom and Pop have their low-level private-sector or government jobs; the Mother-in-law lives downstairs and contributes her social security check for a place to live; and Mom and Pop have bedrooms for Junior and his sister to live while they work part-time or full-time at the casino after they graduate from high school and contemplate college--in this instance, five sources of qualifying income are used!

The regional builders would love to have the casino. The actual construction of the casino will provide short-term, but high paying wages; and the casino will provide a large amount of low paying jobs to help supplement the multi-generational households who are buying the vast majority of new homes in Elk Grove. The steady sales of these types of homes will help keep the construction industry alive in this region for a long time.

Unknown said...

So basically your saying that if a business can't pay enough for an employee to purchase a house, thank they should not be allowed to open? How is it that we have Starbucks and McDonalds in EG? I'm confused. They can always rent. There are several apartments on the city.

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