HOW A NATIONAL $15 HOURLY MINIMUM WAGE WOULD AFFECT AMERICAN RACING AND BREEDING BUSINESSES

There is strong sentiment in the U. S. Congress to mandate a national minimum wage of $15 per hour under the Federal Labor and Standards Act.  This would supersede state minimum wage requirements and have a deleterious impact on many but not all horse trainers and horse breeders.

In New York City, the minimum wage is already $15 an hour and a racehorse trainer must pay at least $15 per hour and $22.50 for overtime. In 2019, a prominent New York City-based trainer was fined over $1.6 million for numerous labor violations, including failing to pay overtime and lax time keeping of employee hours worked. Another top-tier New York trainer quit, citing the cost of doing business.

Minimum wage laws vary considerably.  In New York state outside New York City, Long Island, and Westchester, the minimum wage is $12.50 per hour, whereas in Kentucky the state minimum wage is $7.25 hourly, and in California the minimum wage is $13 for employers with 25 employees or less and $14 for employers with 26 employees or more. The minimum wage in California is scheduled to increase to $15 per hour by 2023 regardless of number of employees and Florida voters in November 2020 passed a constitutional amendment raising the hourly minimum wage from $8.56 now to $15 by 2026.

Exemptions are written into minimum wage laws.  For instance, agricultural workers are exempt from overtime requirements and employers can make adjustments for meals and lodging provided to employees.  Exceptions are made as well for tipped employees and some student workers.

According to the Congressional Budget Office, a federally-mandated minimum wage of $15 per hour by 2025 would lead to a loss of 1.4 million U. S. jobs, but lift 900,000 people out of poverty. 

The flaw in a federal minimum wage is that it does not account for marked cost of living differences across the country.  For instance, a trainer at Belmont Park or Santa Anita likely has a day rate that accommodates a $15 per hour minimum wage, whereas a trainer at Mountaineer Park or Ellis Park would have a day rate that would not. 

Living on $15 per hour while working as a groom at Golden Gates Fields in San Francisco is a challenge no doubt, but $15 per hour would go much further at Oaklawn Park in Hot Springs, Arkansas.  As for farm workers on racehorse breeding farms, they are generally exempt from overtime provisions and are often compensated partly with housing.

A federal hourly minimum wage of $15 would have little effect on stables located in high cost-of-living areas but would be onerous for stables in low cost-of-living venues.  All trainers are classified by the federal government as operating small businesses, as determined by the number of people employed…and many and perhaps most small businesses would struggle to survive with a $15 federal minimum wage. 

Copyright © 2021 Horse Racing Business

Speak Your Mind

*