Strategic pay policies coupled with clear expectations, training, and feedback create the engaged workforce needed for parking’s evolving demands.
By Andrew Sachs
The parking industry stands at a critical crossroads, confronting significant challenges and seizing new opportunities within an ever and rapidly evolving landscape. With shifting mobility patterns, rapid adoption of technological advancements, and corporate consolidations of considerable scale, operators must adapt to remain competitive to be profitable. The interplay of labor costs, customer satisfaction, and profitability is crucial for the industry's viability, yet this connection often receives insufficient attention amid other pressing concerns.
In September 2023, California enacted legislation establishing a minimum wage of $20 per hour for workers in the larger fast food restaurant chains and snack and nonalcoholic beverage chains. Taking effect this past April, California’s 2024 Sectoral Wage-Setting policy, as it is known, provides valuable insights for the parking sector.
The parking industry can draw helpful lessons from California's approach to sectoral wage setting today as well as Henry Ford's forward-thinking wage policies from more than a century ago. Proactively increasing wages can lead to greater employee satisfaction, improved service quality, and a stronger competitive edge for parking operators. Yet, higher wages alone won't suffice — managers must complement these efforts with efficient management practices to fully capitalize on their investment.

The historical precedent of Henry Ford's "Five-Dollar Day"
In 1914, the famously stingy automaker Henry Ford made a bold and unconventional move by doubling the daily wages of his workers to $5. This decision, known as the “Five-Dollar Day,” was not just an act of goodwill, but a calculated business strategy that yielded significant benefits for Ford and his workforce. One of Ford’s primary objectives was to combat high turnover rates and absenteeism that impaired productivity. Ford correctly surmised that low wages were reducing productivity and increasing operating costs. By offering higher wages, Ford attracted and retained a stable, skilled workforce, improving productivity and operational efficiency. His move aligned with the efficiency wage theory, which posits that paying above-market wages can enhance worker productivity and foster loyalty.
This move not only boosted his company’s profitability but also set a precedent for how higher wages could fuel broader economic activity. The positive publicity generated by the Five-Dollar Day positioned Ford as a socially responsible employer, enhancing the company's brand image and attracting both talent and customers. Ultimately, this strategic wage increase was an investment in long-term sustainability, as it cultivated a dedicated skilled workforce that contributed to Ford’s enduring success.
Ford’s decision gave him a formidable competitive edge. While other automakers struggled with high turnover and unmotivated workers, Ford enjoyed a committed, skilled labor force that contributed to higher efficiency and better-quality production. The increased pay also positioned Ford as an attractive employer, enabling him to draw top talent away from rivals. This combination of strategic workforce stability and enhanced productivity translated into higher profitability and market dominance.
The lessons from Ford’s experience demonstrate that proactive wage policies, when implemented strategically, can be transformative, offering valuable insights for modern industries like parking.
Understanding sectoral wage-setting in California
On April 1, 2024, California introduced its first sectoral wage policy, mandating the $20 hourly minimum wage for workers in large fast-food chains. This groundbreaking and controversial policy was designed to improve the livelihoods of approximately 750,000 workers, most of whom were earning significantly less than $20 per hour before the policy took effect.
The policy had an immediate, and substantial, economic effect, according to research conducted by Michael Reich — a professor of economics and the chair of the Center on Wage and Employment Dynamics at the Institute for Research on Labor and Employment (IRLE) of the University of California at Berkeley — and Denis Sosinskiy, a graduate student in the Department of Economics at the University of California, Davis.
In a September 2024 IRLE working paper titled “Sectoral Wage-Setting in California,” Reich and Sosinskiy maintain that average hourly pay for fast food workers increased by 18%, while employment levels remained stable, following implementation of the policy. Contrary to the concerns of many critics, the wage increase did not lead to widespread job losses, the authors found. Instead, businesses adapted by absorbing some of the additional labor costs, resulting in a modest 3.7% increase in menu prices.
This finding challenges the common narrative that higher wages necessarily lead to job cuts or unsustainable price hikes. The fast-food sector’s experience in California demonstrates that businesses can absorb wage increases through strategic adjustments without compromising employment or financial stability.
These insights are crucial for other labor-intensive industries, such as parking, which similarly relies on entry-level positions and has historically been sensitive to changes in labor costs. Understanding that wage increases do not inherently trigger negative repercussions empowers industries to reframe their approach to employee compensation, ultimately supporting long-term operational resilience.
Lessons for the parking industry
The parking industry can draw several vital lessons from California’s sectoral wage policy and Ford’s historical example. One of the most critical takeaways is the importance of proactive wage increases. Waiting for government mandates places operators at a disadvantage, forcing sudden, often disruptive adjustments that strain budgets and impede operations. In contrast, by anticipating and implementing wage increases voluntarily, parking operators can better manage labor costs while simultaneously enhancing employee satisfaction and stability.
Proactive wage adjustments can create a workforce that is motivated, engaged, and less prone to turnover — key elements that contribute to a stronger operational foundation. A stable, committed workforce supports higher levels of service and customer satisfaction, essential factors for maintaining a competitive edge in the market. This forward-thinking strategy not only mitigates the financial shock of compliance with mandated wage increases but also fosters a culture of trust and loyalty, which can set parking operators apart in an industry where reliability and quality service are paramount.
The increasing integration of technology, such as sophisticated parking access revenue control systems, dynamic pricing engines, and license plate recognition (LPR) systems driven by artificial intelligence, has elevated the skill set required of front-line parking workers. Their roles have evolved from simple ticketing and gate operations to managing and troubleshooting complex automated systems in real-time. Drivers in parking facilities are by nature impatient and demand immediate attention to customer service issues, even in gateless facilities. Workers, remote or in person, must now be quick-thinking, technologically adept, and capable problem-solvers who can ensure speedy resolutions and smooth operations.
Attracting and retaining skilled workers who meet these heightened expectations requires offering competitive wages. Without adequate compensation, operators risk cultivating an unmotivated workforce, which can undermine even the most forward-thinking management strategies. Frustrated employees often lead to subpar service experiences, leaving customers stuck at gates or dissatisfied with their interactions. As seen in the fast-food industry, where speed and efficiency are essential, parking customers similarly expect seamless, high-quality service and are willing to pay more for operations that consistently meet their expectations.
Although engaged workers are just one component of an exceptional parking experience, their effect is profound. Achieving superior service is virtually impossible if frontline workers are overlooked. Implementing wage increases ahead of regulatory mandates positions parking operators as proactive leaders in the industry and solidifies their reputation as employers of choice. This approach underscores a commitment to worker well-being and helps create a positive brand image that resonates with both employees and customers.
Modern workers seek employers who prioritize fair compensation and invest in their growth and development. By addressing wage concerns early, parking operators foster a supportive work environment that attracts top talent. This proactive investment in human capital yields long-term benefits, including stronger employee loyalty, enhanced customer interactions, and sustained business growth. In an industry increasingly defined by technology and customer expectations, the decision to prioritize competitive wages is not just beneficial — it is essential.

The efficiency wage theory in practice
The efficiency wage theory posits that paying wages above the market rate can deliver transformative benefits, leading to higher productivity, lower turnover, and stronger employee engagement — all of which are vital for the parking industry’s success. For parking operators, offering competitive compensation positions them as employers of choice, attracting highly skilled and motivated workers who can handle the evolving technological landscape, including advanced parking management systems and automated payment solutions.
Turnover is a hidden yet significant expense in the parking industry, encompassing recruitment, hiring, and training costs that disrupt operations and drain resources. Efficiency wages help mitigate these expenses by incentivizing employees to remain in their roles, fostering a stable, experienced workforce that ensures operational continuity and excellence. This stability is particularly important for parking operations, where employees often serve as the front line in delivering customer service and maintaining facility functionality.
Well-compensated employees exhibit higher morale and deeper engagement, translating into increased productivity and superior customer service — factors that are crucial for the parking industry, where seamless interactions and efficient service can make the difference between a one-time customer and repeat business. Satisfied employees are also less likely to be absent, contributing to consistent, reliable operations that meet customer expectations during peak times and special events.
By investing in efficiency wages, parking operators can create a resilient, committed workforce that enhances customer experiences, supports advanced technology use, and drives business growth. This approach not only strengthens daily operations but also secures a competitive edge in an industry that is becoming more reliant on skilled and adaptable employees.
Adapting to market conditions, economic responsiveness
The fast-food industry’s experience demonstrates that businesses can adapt to wage increases without significant negative effects on employment. This adaptability is an important lesson for the parking industry. By aligning wages with market conditions, parking operators can maintain a competitive compensation structure that supports operational stability and budget management. Maintaining competitive wages is not just a regulatory concern; it is also a strategic move to attract and retain a skilled workforce in a labor market that is increasingly competitive.
To manage labor costs while maintaining profitability, parking operators can leverage a host of pricing strategies and management practices that are beyond the scope of this article.
Industry leaders can leverage the lessons learned from Ford’s Five-Dollar Day. While unenlightened competitors squeeze their workforces, savvy operators empower their employees with respectable wage increases combined with clearly explained expectations, raised standards for customer service, and management tactics that support employees to increase productivity and happiness. The parking industry is a tight community. As word spreads, progressive operators will have their pick of the best employees, making it easier to replace toxic and unproductive workers who drain the resources of otherwise healthy organizations.
Enhancing reputation and compliance
Voluntarily raising wages can significantly boost a parking facility’s reputation, positioning it as an employer of choice. This positive brand image can attract customers who appreciate and support companies that uphold ethical practices. Such customers are often willing to pay a reasonable premium for services that align with their values, providing operators with an opportunity to differentiate themselves in a competitive market. More importantly, the marketing and messaging should focus on the benefits of an engaged workforce for the customers.
Moreover, proactive wage practices can ease the burden of regulatory compliance. When parking operators establish fair compensation practices ahead of mandates, they are better prepared to handle future legislative changes without the disruptions or penalties that can accompany sudden compliance efforts. This can be a significant competitive advantage for the enlightened operator over flatfooted competitors and can lead to smoother operations and reduced risk, ultimately supporting long-term business stability.
Establishing expectations and control in the industry
While raising wages is a critical step toward enhancing employee satisfaction and retention in the parking industry, it is not sufficient on its own. Parking operators must ensure that higher wages translate into improved performance by setting clear expectations and aligning employee efforts with operational goals. Without proper management practices, even well-compensated employees can become complacent or frustrated or underperform. To effectively establish expectations and control to maximize the benefits of wage increases, parking operators must pay attention to the following points:
• role clarity
• performance metrics
• continuous feedback and support
• balanced cost control
• training and development
• ecognition and empowerment
Defining job roles and responsibilities: Managers need to explicitly define job roles and responsibilities to prevent ambiguity and confusion among employees. In the context of parking operations, employees should be well-versed in their daily tasks, which may include operating and troubleshooting advanced systems like automated payment solutions and LPR technology. Clear job descriptions and detailed standard operating procedures (SOPs) establish consistency and accountability, ensuring that employees understand what is expected of them.
Linking wage increases to performance: Wage increases must connect to well-established performance metrics that guide behavior and measure success. These metrics should be specific, measurable, and aligned with both individual and team objectives. For parking operators, relevant performance indicators might include customer satisfaction scores, the number of resolved parking transactions, and technical proficiency in using advanced parking systems. Tying these metrics to performance reviews and incentives motivates employees to maintain high standards and drive continuous improvement.
Implementing feedback loops: Regular feedback loops are vital to help employees stay on track and make necessary adjustments. Managers should implement structured feedback systems that provide constructive insights, fostering an environment of transparency and trust. Support systems such as one-on-one check-ins and open-door policies encourage employees to voice concerns and seek guidance, reinforcing their commitment to the organization. This ongoing dialogue can help identify areas for improvement and recognize achievements, further motivating staff.
Strategic staffing and resource management: While higher wages represent an investment in the workforce, maintaining financial health requires strategic cost control. Parking managers must optimize staffing schedules to match labor availability with peak and off-peak hours, reducing unnecessary expenses. Cross-training employees to handle multiple roles enhances workforce flexibility, reducing the need for additional hires and enabling more efficient resource allocation. This approach not only helps manage costs but also empowers employees to take on diverse responsibilities, increasing their engagement and job satisfaction.
Investing in continuous training: Providing ongoing training ensures that employees are equipped to meet evolving job requirements. This investment helps workers stay up to date with new technologies and industry trends, enhancing their overall productivity and adaptability. Training programs should cover both technical skills, such as operating advanced parking systems, and customer service skills to create a well-rounded, capable workforce. By fostering a culture of continuous learning, parking operators can ensure that their employees are prepared to meet the demands of a changing industry.
Fostering a culture of appreciation: Simply raising wages is not enough to sustain motivation; recognition of employees' achievements is equally important. Implementing formal recognition programs or simply acknowledging individual contributions can foster a culture of appreciation and initiative. Empowering employees to make decisions within their roles encourages innovation and accountability, leading to a more dynamic and engaged team. When employees feel valued and trusted, they are more likely to take ownership of their work and strive for excellence.
The parking industry can glean significant lessons from California’s sectoral wage-setting policy and Henry Ford’s proactive wage strategy. By voluntarily raising wages, parking operators can boost employee satisfaction, enhance service quality, and solidify their market position. However, raising wages alone is not enough — managers must ensure that these investments are maximized through effective management practices.
Establishing clear expectations, aligning wages with operational goals, providing continuous feedback, and implementing strategic cost management are essential to turning wage increases into substantial returns. This comprehensive approach drives a motivated, productive workforce that enhances customer satisfaction and operational excellence.
As the industry continues to evolve with technological advancements, investing in human capital through fair compensation and effective management will be vital for long-term success. By prioritizing strategic, forward-thinking wage policies and remaining adaptable to market changes, parking operators can transform challenges into opportunities and thrive in an increasingly complex and competitive environment.
ANDREW SACHS is president of Gateway Parking Services. He can be reached at andrew@gpsparking.com.