Unions Want Exemption from the Minimum Wage Hikes They Fought For

NCPA June 1, 2015

Although the union-funded Raise the Wage campaigned so vociferously in favor of a $15.25 minimum wage, unions are seeking exemptions from the higher wages for their members. The exemption, or escape clause, would allow them greater strength in organizing workplaces.  Unions can tell fast food chains, hotels, and hospitals that if they agree to union representation, their wage bill will be substantially lower.  That will persuade employers to allow the unions to move in. 

Take Fight for $15, funded by the Service Employees International Union, demonstrations that occur regularly outside fast food outlets.  Or, take Black Friday demonstrations outside Walmart, organized annually the day after Thanksgiving by OUR Walmart, funded by the United Food and Commercial Workers.

But now that unions have achieved their goal in Los Angeles, their leaders want to exempt unionized workplaces from the minimum wage hike. 

• 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. 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 losers in this scheme are employees, who have to pay union dues out of their paychecks.  Jobs become more scarce as wage levels rise and some less-skilled workers become unemployed.

Instead of exempting union workers from the minimum wage, it would make sense to exempt teens and low-skill workers, because they are the ones most harmed. 

Rather than caring about low-income Americans, unions care about their own power. Dues and initiation fees are often used to pay for political contributions. Unions donated $60 million to the 2014 campaign, almost all to Democrats. Do not expect municipalities with Democrat governments elected with these donations to stand in the way of union hypocrisy.

Source: Diana Furchtgott-Roth, "Why Unions Exempt Themselves from Hard-Fought Minimum Wage Hikes," Economics 21, May 28, 2015.