The Workers Previously Protested Icahn’s Actions in October 2014 and March 2015 (seen here)
68 union workers at the Trump Taj Mahal were arrested for blocking the street on Wednesday, while protesting the loss of their benefits. Atlantic City police spokeswoman Sergeant Monica McMenamin said the casino employees refused to order an official order to move, so the police had to forcibly remove them from the street.
Charles Baker, who is a relief cook at the Taj Mahal, was one of the protestors. Mr. Baker said it was time stand up against benefit cuts, which affect the welfare of him and his family. Speaking for a generation of middle class Americans seeing themselves slide down the economic ladder, Baker said, “I can get a job anywhere. I need a job with benefits. I can’t afford to buy healthcare.”
Reason for the Unite Here Rally
The UNITE HERE union, the largest workers union representing casino employees in Atlantic City, organized the protest on Wednesday outside the Trump Taj Mahal casino. The union members were protesting a bankruptcy court-ordered cut in the pension and healthcare benefits for 1,000 casino workers in the Local 54 chapter, which represents the housekeeping staffers and the food and beverage workers at the Trump Taj Mahal.
Trump Entertainment Resorts issued a statement expressing its disappointment that such protests would take place. The gaming company’s statement read, “Taj employees do not benefit from this type of disruptive conduct. It is unfortunate that Local 54 leadership is willing to sacrifice the wages and tips of its members by actively attempting to persuade customers and conventions to boycott the Taj Mahal.”
October 2014 Protests
The union organized a similar protest in October 2014, when this issue first came to light. That protest involved hundreds of workers. Twenty-four people were arrested for blocking the street.
The new owner of the Trump Taj Mahal, Carl Icahn, called for the benefit cuts in exchange for his agreeing to keep the Atlantic City casino open. Icahn argued that no one else would pay to keep the Atlantic City resort open, so he should be given consideration which would help him operate at a profit.
The union balked in negotiations, arguing that the workers needed their pension benefits and health benefits. Therefore, Trump Entertainment took the union to court in October 2014, winning a decision based on a controversial 2013 case. UNITE HERE argued that labor laws traditionally did not allow such cuts to a benefits package, with some manner of collective bargaining.
Local 54 Spokesman
Ben Begleiter, a spokesman for the Local 54 chapter of UNITE HERE, said that the New Jersey judge took away many of the reasons people got into a career in the casino industry. Begleiter said, “The workers lost their health insurance, retirement security, job security, and even their paid lunch breaks.”
Though Carl Icahn was able to roll over the labor union through the court system, Local 54 is serving notice that the work atmosphere at the new Trump Taj Mahal could be toxic. Their protest is likely to involve a thousand or more people, bringing scrutiny from the media and opprobrium from residents.
New Jersey Lawmakers Take Notice
The New Jersey legislature’s decision not to pass a PILOT bill for Atlantic City casinos last December shows what unpopularity can do for a business owner. Lawmakers wanted to pass a bill which would set the tax level on casinos each year, avoiding an escalation in prices and the yearly legal battles involving tax appeals. Lawmakers eventually decided not to pass the PILOT bill, because one key member said he did not want to see Carl Icahn profit from the legislation.
Carl Icahn’s History
The protests are not likely to have an effect on Carl Icahn, who is an old veteran of buyouts and takeovers. These days, he is referred to as an “activist investor”, a broad term used to mean big investors in a company who want to use their cash to influence the board of directors. Often, activists investors seek to place people on the board or sit as a directors themselves, though they usually prefer not to take over the company itself.
Studies have shown such investors tend to have a positive effect on how a corporation runs, with the stock prices and profits going up when one gets interested in improving a company. Of course, stock prices are not a good indication of how such decisions affect the average employee. The kind of streamlining activist investor wants is often done at the cost of a smaller workforce, or reduced pay and benefits for the workers.
In the 1980s, Carl Icahn was one of the class of executives called a corporate raider. These people bought a company, then sold off its constituent parts for larger profits than they were worth as a whole. Corporate raiders once again streamlined companies, though often with hard news for the rank-and-file employees.
Streamlining the Business
Though one term is seen as in a negative light and the other in a positive light, the two types of investors can often have similar effects on a business. When Carl Icahn invested over $280 million in Trump Entertainment, he was seeking to influence its executive staff to take the measures which would allow the Trump Taj Mahal and Trump Plaza to succeed. Those measures might have looked similar to what is happening now with the UNITE HERE benefits.
Of course, Trump Entertainment needed more help than Icahn could give as an outside director. Eventually, he had to buy a majority stake in the company. Now, he does directly what he might have advised others to do before.
Tropicana’s Turnaround
One does not have to suppose Mr. Icahn is a Scrooge in this matter. He might well have reason to believe his way is going to work. Reason exists to believe his way is going to bring prosperity to the Trump Taj Mahal. When Carl Icahn bought the Tropicana in 2010, it was facing a similar bankruptcy. Five years later, workers there say he energized the company, invested a lot of money in the operation, and brought pride back to the work staff.
Whether that happens in the case of Trump Taj Mahal is uncertain. The biggest protest yet happened on Wednesday. Carl Icahn will continue with his financial plans.
