FlyerTalk Forums - View Single Post - Lots of delays at ORD on Jan 12, 2016 due to Catering
Old Jan 14, 2016, 12:36 am
  #76  
threeoh
 
Join Date: Sep 2014
Posts: 2,530
Originally Posted by exerda
But, a summary is that they switched the contract to LSG SkyChefs (owned by Lufthansa IIRC) from the prior contractor. There was great uncertainty over which employees would be retained at ORD, and what would happen to their salaries (as LSG isn't based in Chicago, they are able to pay slightly lower wages--I guess Chicago has a tiered minimum wage law where local companies have to pay higher wages than the Illinois state minimum?).
As of last July, minimum wage in Chicago is $10 (on its way to $13) no matter where your company is based.

According to the article, LSG's O'Hare facility is located in Des Plaines (suburb immediately adjacent to the airfield) so it only has to pay its workers the $8.25 state minimum, whereas it seems Gate Gourmet's facility is in the city proper.

So even if LSG kept all of the Gate Gourmet employees, if they are near minimum wage they'd be taking a 20% pay cut -- which is probably how LSG underbid Gate Gourmet.
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