Now that the Los Angeles City Council is moving quickly toward increasing the city's minimum wage from $9 to $15 over the next five years, the labor unions that aggressively supported the measure seem to be having second thoughts.
Why would unions want to exempt themselves from a law they’ve spent tens of millions of dollars trying to pass in L.A. and other cities and states?
Rusty Hicks, executive secretary-treasurer of the Los Angeles County Federation of Labor, told the Los Angeles Times that employers and employees should be able to negotiate a lower minimum wage as part of collective bargaining agreements. But that flies in the face of unions’ aggressive objections to proposals by the California Restaurant Association—which has led a strong grassroots effort in opposition to the measure—to include a teen wage in the law and allow restaurant owners to utilize a total compensation model for tipped employees.
According to Diana Furchtgott-Roth, director of Economics21 at the Manhattan Institute and former chief economist at the U.S. Department of Labor, the unions’ effort to exempt unionized employers from paying a higher minimum wage is likely an effort to fatten their own coffers.
“Once the higher minimum wage bill is signed into law, with the exemption for unions, then organizing becomes a win-win for employers and unions,” she wrote in an Economics21 article. “Unions get initiation fees of about $50 per worker and a stream of dues totaling 2 percent to 4 percent of the workers’ paychecks. Employers get a lower wage bill.”
The push for higher minimum wages is also a matter of survival for unions, who have seen their membership numbers steadily decrease over the past few decades, Furchtgott-Roth wrote.
“Unions are resorting to campaigning for higher minimum wage laws and then carving out exemptions for themselves because they are desperately short of members,” she wrote. “Their membership has been steadily declining over the past three decades. In 1983 (the earliest year with comparable data), 20 percent of American workers belonged to unions. By 2014 only 11 percent of American workers, and only 6.6 percent of private sector workers, were union members.” Those numbers mean there are three million fewer union members than there were in 1983, even though the total number of employed people has increased by 48 million, Furchtgott-Roth wrote.
Take a look at what others are saying about the unions’ attempt to avoid paying a $15 minimum wage:
Time: Unions say it’s OK for businesses to sidestep the L.A. minimum wage
Los Angeles Times: L.A. labor leaders seek minimum wage exemption for firms with union workers
Bloomberg: Now union opposes the minimum wage
Competitive Enterprise Institute: Union bosses lobby for exemption from $15 L.A. minimum wage
Breitbart: Hypocrites: L.A. labor wants exemption from $15 minimum wage
Washington Times: L.A. labor leaders seek $15 minimum wage exemption for union allies