(Bloomberg) — The snowiest peaks in the U.S. are the latest site of pitched union battles, a result of the growing corporatization of the $11 billion ski industry and a widening wealth divide between those who own resorts and those who keep them running.
Labor’s promise of better compensation and job security has proved particularly enticing to ski patrollers. They remain among the nation’s lowest-paid employees, earning less than bellhops and barbers despite being required to perform dangerous tasks, such as tossing dynamite over cliffs before sunrise to head off avalanches. Meanwhile, companies like Vail Resorts Inc. and Peak Resorts Inc. are seeing ever-mounting profits.
Last year, the 55 patrollers at Colorado’s Telluride Ski Resort voted to form a union, as did nearly 200 counterparts at Utah’s Park City Mountain Resort, which opened this winter as the country’s largest ski area after Vail Resorts took it over. In November, a similar effort at Taos Ski Valley in New Mexico’s high desert ended in a bitter defeat. At Beaver Creek Resort in Colorado, also owned by Vail, a fight to allow instructors to collectively bargain is underway.
“Workers are seeing the opulence and the money that is coming into the industry, and yet they’re making barely above minimum wage,” said Al Kogler, an administrative director at the Communications Workers of America, which represents 700,000 U.S. and Canadian workers in diverse industries and has been at the forefront of the ski-resort unionization. He says efforts to unionize have begun at half a dozen more resorts across the Rockies.
The ranks of U.S. ski areas have been thinning for decades. Last winter, 470 opened for the season, 76 fewer than when the National Ski Areas Association began keeping count in 1991. Those that remain tend to be bigger, better and more profitable than ever, said Michael Berry, the trade group’s president. Publicly traded corporations, real estate investment trusts and private equity firms have snapped up areas formerly run by family owners on shoestring budgets.
Revenue from equipment rentals, retail and ever-more- expensive lift tickets has enriched those at the top. At Vail, Chief Executive Officer Robert Katz was paid $5.3 million last year, up 6 percent over the previous year, according to the Securities and Exchange Commission.
Ski patrollers, whose tasks include ferrying broken-legged skiers to safety in toboggans, and venturing into avalanche-prone areas, earn just over $9 an hour, according to the Bureau of Labor Statistics.
Unionized units are rare, largely because the vast majority of the country’s more than 26,000 members are volunteers and ineligible to unionize, said Mark O’Connor, a retired member who chairs Ski Patrol Inc., an Iowa nonprofit that works on their behalf. O’Connor predicts more unionization bids among patrollers toiling for low salaries and meager benefits.
The growing wealth divide on the slopes — and the frustration it’s engendered among those on the bottom — mirrors the economic shift that has long been taking place in the U.S., as wealth gains made over three decades have accrued primarily to upper-income earners. Compensation of chief executive officers at top U.S. firms grew by nearly 1,000 percent since 1978, while a typical worker’s pay increased by just 11 percent during the same period, according to the Economic Policy Institute, a pro-worker research and advocacy group based in Washington.
At Taos, the founding family didn’t sell to a large corporation. They chose Louis Bacon, the billionaire founder of New York hedge fund Moore Capital Management who was also a longtime skier there and conservationist. Even so, the deal set off a fight that would expose deep rifts between the mountain’s management and patrol.
Tucked amid ponderosa forests and adobe homes, the resort was founded in the 1950s by Ernie Blake, a Swiss Jew who fled Nazi Germany for the U.S. and spotted a promising basin while flying his single-engine Cessna 170. Blake transformed the mountain into a bohemian paradise that attracts broke ski bums and Hollywood stars by importing chefs and instructors from Europe, while capitalizing on the growing art scene in nearby Santa Fe.
For years, the mountain had been losing patrons amid drought and increasing competition from flashier resorts with new amenities. That left the Blakes struggling to invest in capital upgrades needed to compete with deeper-pocketed rivals like Vail and California’s Mammoth Mountain, which is run by a private equity firm and recently acquired family-operated Bear Mountain near Los Angeles.
In 2013, then-chief executive Mickey Blake, son of the founder, admitted defeat and approached Bacon. Many skiers heralded a new owner wealthy enough to invest in the mountain. Since the sale closed in June 2014, Bacon has indicated he’ll spend an estimated $300 million on upgrades, including a spiffed-up base village that will feature new dining options, a childcare center and a spa. Most recently, he completed a $3 million chairlift to the resort’s most challenging summit, 12,500-foot Kachina Peak.
For the 44-member Taos ski patrol, the need to seek union protection wasn’t immediately clear. In a ceremony of sorts, patrollers bestowed Bacon with an honorary red parka, and joked that it was probably the most expensive jacket he’d ever purchased. They also guided him to choice terrain closed to the public, something they’d enjoyed doing for Ernie Blake.
The mountain increased its starting wage for patrollers to about $11 per hour, boosted staff by 15 percent and allotted full-timers $800 per year to buy equipment, according to chief executive officer Gordon Briner.
Still, feelings of vulnerability spread throughout the patrol force, said Rey Deveaux, a 40-year veteran. Management brought in consultants, rumors circulated that the old-guard patrollers could be targeted for layoffs and the policy of issuing them the time-honored privilege of lifetime season passes after two decades of service was put under review.