In every major city that is increasing the minimum wage (Seattle, San Francisco, Los Angeles), labor unions have been at the forefront of the change. For example, in an op-ed for the Huffington Post titled “Raise Los Angeles’ Minimum Wage and Enforce It,” Rusty Hicks, a labor leader in L.A. who represents over 300 unions, wrote:
It’s no secret that we believe the minimum wage must be raised in order to lift working families out of poverty. Most voters and many members of the city council and the Los Angeles County Board of Supervisors agree with us. But we believe enforcement is the key to success in any new minimum wage policy.
Apparently, what Hicks meant was that enforcement was necessary except when applied to unions. This week—a month after his HuffPo op-ed—Hicks has taken a different perspective:
… Rusty Hicks, who heads the county Federation of Labor and helps lead the Raise the Wage coalition, said Tuesday night that companies with workers represented by unions should have leeway to negotiate a wage below that mandated by the law.
“With a collective bargaining agreement, a business owner and the employees negotiate an agreement that works for them both. The agreement allows each party to prioritize what is important to them,” Hicks said in a statement. “This provision gives the parties the option, the freedom, to negotiate that agreement. And that is a good thing.”
Commenting on this quote, Tim Worstall says, “It’s difficult to know whether to giggle, guffaw or scream in rage at the arrogance of that.”
Union leaders may be arrogant, but they aren’t stupid. They understand that raising the minimum wage will kill jobs—they just don’t want it to be union jobs that disappear. They are more than willing to allow workers to be paid less than $15 an hour provided that a cut of the worker’s paycheck goes to pay their union salaries. They also realize that the mandatory wage increase will have an extortionary effect on employers: “Can’t afford to pay the high minimum wage? Well, if you become a union shop you can circumvent that pesky law. . .”
But notice also what the unions are saying : business owners and employees should have the “freedom” to negotiate an agreement that works for them both. The caveat, union leaders would add, is that this only applies for “collective bargaining.” It doesn’t seem to matter if employees are worse off than they would have been without the unions “help.”
Imagine, for example, that in 2020, a business owner and an employee in L.A. negotiate a salary. The employer would like to pay $12 an hour, while the employee wants $14. They compromise and agree to an hourly wage of $13.50. Unfortunately, that would be illegal in L.A. The employer would have to pay either $15 an hour or $0 (by not hiring the employee).
But imagine we add a third party—a union leader—into the negotiations. That same business owner agrees to a union’s collective bargain agreement that allows him to pay $10 an hour. The employer is much better off while the employee is much worse off. What really matters—at least to the union leaders—is that the union is better off. They will be are able to keep dues-paying, voting bodies in their union so that other employees can negotiate a higher salary for themselves (and union leaders can continue to get paid).
Before his change of heart, Hicks said that, “Raising the wage and ensuring that workers actually receive a full paycheck is critical to continuing to grow the Los Angeles economy and ensuring workers can move toward the middle class.” Along with other union leaders, Hicks should be required to answer this simple question: “If the $15 minimum wage is beneficial for workers in L.A. and the economy as a whole, why would you not want unionized workers to receive the same pay increase?”
