Marley Pfeffer and Nelson Mercado don’t know each other, but they sat side by side on a recent day at the state unemployment office in Pleasantville, both peering at computer screens for job opportunities that would put them back to work.
They are recent casualties of mass cutbacks in the slumping casino market — an economic crisis that has claimed nearly 10,000 jobs in the past five years in Atlantic City’s dominant industry. Casinos have slashed 20 percent of their work force since 2005, according to employment figures compiled by the New Jersey Casino Control Commission.
“Personally, I’m concerned, because you hate to see so many people in your community lose their jobs,” said Michael C. Epps, a casino commissioner. “Hopefully, when the economy finally turns around, we’ll be in a stronger position and the jobs will come back.”
As casino revenue has plummeted, so has the number of jobs. The sputtering economy and the rival casinos in Pennsylvania have sent Atlantic City gaming revenue plunging to levels not seen since the 1990s.
Revenue peaked at $5.2 billion in 2006, but dropped to $3.9 billion in 2009 and is down another 9 percent through the first 10 months of this year. If downward trends continue, the casinos will gross about $3.6 billion in revenue from the slot machines and table games in 2010, below the $3.75 billion in 1995.
Casino job cuts have accelerated this fall, reflecting the wholesale seasonal layoffs that happen every year during Atlantic City’s post-summer tourism slowdown. Just last week, Trump Entertainment Resorts Inc. cut 250 workers at its three casinos. Nearly 1,400 jobs were eliminated in September and another 756 in October to reduce the casino industry’s total work force to 35,161, not including the Trump layoffs last week.
In October 2005, casinos employed a total of 44,975 workers.
“It’s a reaction to the revenue declines in Atlantic City,” Mark Giannantonio, president of Tropicana Casino and Resort, said of the disappearing jobs. “Five years ago, we were a monopoly. Now, we are surrounded by gaming across the border.”
Robert McDevitt, president of Local 54 of UNITE-HERE, the gaming industry’s largest labor union, said many casino workers believe they no longer have any job security.
“I think the average worker in Atlantic City is worried about their future, no matter where they work,” McDevitt said. “They’re very conscious of the overall problems with the industry in terms of revenue and the number of visitors going down and the vacant hotel rooms.”
Pfeffer and Mercado recalled how they were summoned into the casino offices and told they were no longer needed. Pfeffer, a bartender at Tropicana, was laid off in November. Mercado lost his bar porter job at the Atlantic City Hilton Casino Resort in September, just after Labor Day.
“Basically, they told me that revenue was down, that business is very slow and that there were too many employees,” said Pfeffer, 27, of Ventnor. “I was hurt, discouraged. It’s a bad season to be out of work. It’s nearly Christmas. I know the bills will start to pile up.”
Mercado, 29, of Linwood, has grown frustrated by his inability to find a new job. At the Hilton, he would work the overnight shift and attend classes at Atlantic Cape Community College during the day. He wants another job in Atlantic City that won’t conflict with his classroom schedule.
“It’s really hard,” Mercado said. “There’s hardly anyplace where they are hiring. You could end up on the streets.”
Declining since 1998
Total casino employment is now at levels similar to the late 1980s. It is well below the peak of 51,560 jobs in July 1997. When the Sands Casino Hotel closed in 2006, about 2,200 jobs were lost.
Brian J. Tyrrell, associate professor of hospitality and tourism management at The Richard Stockton College of New Jersey, said casino employment began to fall in 1998 and has declined in each year since then except for 2000 and 2003. The growth was tiny in 2000, but was more significant in 2003 because of the opening that year of Borgata Hotel Casino & Spa, Tyrrell added.
Atlantic City’s job cuts usually range between 2 percent and 4 percent annually, but jumped in 2007 in response to the start of casino gambling in Pennsylvania in 2006. Some months in 2007 had job cuts of between 8 percent and 9 percent. There was another sizable cut in 2009 when the recession was in full force, Tyrrell said.
Big swings in the casino workforce affect other sectors of the local economy. Tyrrell explained that job cuts can cause “disarray” for municipalities when they try to calculate the property taxes to finance their operating budgets or for school districts when they forecast their student populations and the number of teachers they will need.
“Without a doubt, there is a ripple effect,” he said. “I know of several people in the casino industry who have picked up their roots and gone to other areas of the country where gaming is growing. I’ve had neighbors move. I know of parents of soccer kids who have moved.”
Other than state-mandated minimum staffing requirements for key positions such as security and surveillance, the casinos are free to adjust their payrolls in whatever way they choose. Epps, of the Casino Control Commission, said regulators are concerned about the shrinking workforce, but are essentially powerless to stop the layoffs.
“It’s a business decision,” he said. “But it seems to me that this trend is consistent with the national trend for job loss that we have seen in the last three years as the economy has gone through the Great Recession, as it has become known. Miraculously, we had survived it for a long time, but the layoffs have caught up to us and are now coming hot and heavy.”
Tyrrell argued that some of the job losses may not be as severe as they appear on paper. Some are the result of more sophisticated technology in the casino industry. For instance, the modern ticket in-ticket out slot machines have eliminated the need for attendants to collect the change from the old coin-operated slots, Tyrrell said.
Many other jobs have been absorbed by the outside contractors that operate the bars, restaurants, nightclubs and retail stores inside the casinos. Those jobs are no longer listed in the casino employment statistics, making it appear as though they were lost altogether. However, Tyrrell said the restaurant, retail and entertainment employees are simply working for another employer now.
“A silver lining is that we’re seeing diversity in Atlantic City’s nongaming attractions,” he said. “You see increases in hotels and food and beverage and restaurants and bars and entertainment for jobs.”
Pfeffer, though, fears that bartending jobs in Atlantic City will be hard to find as long as the economy remains weak. She has started to look outside the casino industry for job opportunities, with the cruise lines one possibility.
“I was a bartender for two years at Tropicana. I once thought I would stay in Atlantic City, but now I would be willing to move to get a new job,” she said.
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