Gian-Carlo Scandiuzzi, the executive director of downtown's bustling ACT Theatre, knows what his organization is going to do if raising the minimum wage to $15 an hour doesn't become law—it's going to voluntarily raise its minimum wage anyway. So will Theatre Off Jackson, the tiny basement theater in the International District, even though its budget is roughly 3 percent of ACT's.
"It's the right thing to do," Scandiuzzi said. Both theaters have run the numbers and decided they could, and would, raise their wage floor to $15 without a single layoff. Scandiuzzi said the department heads at ACT are cutting their budgets with a smile—perhaps for the first time in the theater's history—because they're committed to finding a solution. "Savings," he said, "do not always have to be on the backs of workers."
Despite the outcry from some restaurant and bar owners in the past few weeks, not everyone running small and midsize businesses with razor-thin margins is panicking about the prospect of a $15 minimum wage. Arts organizations large and small say they will do what it takes to increase wages. "There has been some number crunching," said Donald Byrd, artistic director of Spectrum Dance Theater. "When the board and managing director are led by their humanity, they too are optimistic."
True, these theater and dance companies are nonprofits, but just like for-profit businesses, they have to maintain a balance sheet, and just like many small businesses, they operate on margins that range from slim to nonexistent. (And, because they file detailed and transparent financials with the IRS every year, the public can verify exactly how thin those margins are.) Some arts organizations say they won't be affected by a wage increase because they haven't designed their business to pay people as little as possible. "We don't pay anyone less than $15 an hour," said Sarah Wilke, managing director of On the Boards. "It has been a priority for our staff over the past several years to continually and gradually increase wages." Others, such as Theatre Off Jackson and Hugo House, pay close enough to $15 that they can adjust without a crisis, including their bartenders and other tipped employees. "There will be a little bit of a hit, but it's not scary for us," said TOJ executive director Patti West. "Even though I run a business, I have a hard time disagreeing with paying people a living wage."
The leanest organizations, such as Annex Theatre, would actually benefit because they're volunteer-based. Many of their volunteers and artists work minimum-wage day jobs, and would probably receive raises if the minimum wage increases to $15 an hour citywide, leaving them more financially stable and allowing them to devote more time and resources to the theater. Annex managing director Stephen McCandless wrote in an e-mail that the combination of a wage hike and greater access to health care, through the federal Affordable Care Act, would "make it less suicidal to pursue art (and any other entrepreneurial attempt) in America."
Not everyone is confident about making the change without layoffs. D. David Brown, managing director of Pacific Northwest Ballet, said through a spokesperson that an abrupt jump to $15 an hour could cause job losses. Last month, the 5th Avenue Theatre eliminated seven full-time administrative positions—for unrelated reasons—and managing director Bernadine Griffin said the theater doesn't know yet whether it could increase wages and avoid layoffs. "It would be tough," she said, "but we are also supportive of steps that help address income inequality."
But the overall tone among arts organizations—some with thin margins, some with no margins at all—is much less panicked and pessimistic than among some other business owners. "I think the hullabaloo is for nothing," said Michael Hayes of Hugo House. "I would think a small price increase would probably stabilize things. Not that my background is in economics." That idea, however, is consistent with studies by economists at the University of California at Berkeley, led by Professor Michael Reich. Their research shows that when cities improve wages and conditions—as in San Francisco, which currently has the highest minimum wage in the country and has passed a series of bold worker-friendly laws that initially provoked opposition—a combination of savings from lower employee turnover and modest price increases keep businesses stable. "We did not find smaller restaurants closing at a higher rate," Reich wrote in an e-mail.
Scandiuzzi thinks if theaters can adapt, other businesses can as well. Before he worked in arts administration, Scandiuzzi had a long history in small business—as employee and employer—working in movie production and distribution, concert production and promotion, and restaurants. “I grew up in the restaurant business,” he said. “My parents were in the restaurant business—I know it’s hard. But theaters live with financial catastrophe all the time.” Scandiuzzi admitted it's counterintuitive for the nonprofit arts world, which is so economically precarious, to lead the way on raising wages. “But we, as an institution, can say, ‘Yes, we can make it work’ not ‘Oh my god, we’re going to fire people!’” he said. “Why? Because people are worth it.”