The $15 an Hour Minimum Wage: A Bad Idea with a Union Label
It began at the fringes. And almost at warp speed, the campaign for a $15 an hour federal minimum wage has taken center stage. The Democratic Party has made it part of its platform. Presidential candidate Hillary Clinton all but supports it. Her intraparty rival, Bernie Sanders, is sponsoring a bill to achieve it. Cities such as Los Angeles, Seattle and Washington, D.C., plus the states of California and New York, have passed laws to phase it in. Heavily driven by organized labor, supporters insist that a $15 an hour minimum is way overdue. The current $7.25 an hour, they say, has not kept pace with the cost of living, driving a great many Americans into poverty. This claim is off-base. And if fully realized, such legislation would leave a trail of unemployment and shuttered businesses. In some places, this has begun to happen.
National Legal and Policy Center described at length the logic, motives and strategy of the $15 an hour minimum wage campaign in September 2013 and again in September 2014. Back then, the idea was in its germination stage. The Service Employees International Union (SEIU) gave vocal support, but other unions, much as they sought an increase, seemed reluctant to go so high all at once. The subsequent burst of support is a testament to the capacity of an artificially-created “bandwagon” to shape public opinion. And much of the public does view the idea favorably. According to a poll last year conducted by the National Employment Law Project, admittedly a less than unbiased source, about 60 percent of respondents supported a $15 an hour minimum wage.
Street activists, with their raised-fist, phonetically-catchy slogan, “Fight for Fifteen” (#FightforFifteen), have gone all out to convince the American public that anything less than that would be an affront to moral justice. Rarely, if ever, do these enthusiasts weigh the consequences of such actions. And the consequences of doubling the current federally-mandated level would not be good for employers. Nor would they be good even for most of their intended beneficiaries, entry-level employees.
The Fight for Fifteen campaign is driven foremost by organized labor. Whether directly or indirectly, unions have been involved in every campaign to create a $15 an hour minimum wage. On the federal level, the AFL-CIO, whose 56 member unions represent 12.5 million workers, is calling upon Congress to pass legislation to that effect. The federation notes on its website that the minimum wage would be $18.42 an hour if productivity gains in the U.S. economy since 1968 were taken into account. In New Jersey, the state AFL-CIO chapter this year testified on behalf of a New Jersey Senate Labor Committee bill to phase in a $15 an hour minimum by 2021, an 80 percent increase over the current $8.38 an hour. The Senate passed the measure on June 23, setting up a showdown with Republican Governor Chris Christie. And on a local level, Raise Up Cleveland, an ad hoc group representing dozens of unions with roughly 100,000 unionized workers in the Cleveland metro area, passed a resolution this June to raise the minimum hourly wage for the city to $15. “The fight for the $15 an hour movement is happening in the streets and on picket lines, and it is happening in Congress, statehouses and city halls,” said Raise Up Cleveland Executive Secretary Harriet Applegate. On that, she is right. This is an all-out national campaign.
The greatest impact of the unions is being felt in its alliances with “worker centers.” These nonprofit storefront operations, though formally not unions, perform key functions of unions, including organizing and picketing, but without having to comply with the National Labor Relations Act. Many came about to serve the needs and interests of first-generation immigrants. Not only do unions work with worker centers, they often use them as fronts. There is a mutual advantage to such an arrangement. Worker centers get expertise in how to organize entry-level workers. Unions can realize boosts in membership, dues and bargaining power, especially in the fast food, home care, building maintenance and other service industries in which many immigrants of limited English-speaking ability work. The SEIU, for example, is the driving force behind a New York City-based coalition, Fast Food Forward, that launched the Fight for Fifteen movement on August 29, 2013 by leading walkouts and demonstrations at various restaurants.
Fast Food Forward, as Union Corruption Update noted at the time, is virtually identical to New York Communities for Change, the reconstituted New York City chapter of the now-disbanded Association of Community Organizations for Reform Now, or ACORN. Meanwhile, the “HERE” (Hotel Employees and Restaurant Employees) portion of UNITE HERE is sponsoring its own worker center, Restaurant Opportunities Centers United, which in addition to lobbying lawmakers to raise the minimum wage to $15 an hour, helps federal and state agencies enforce minimum wage laws, files lawsuits to win wage settlements, and publishes an annual “ethical eating” guide. And the United Food and Commercial Workers is the prime backer of OUR Walmart, an employee-sponsored worker center which has organized strikes, pickets and customer disruptions at selected Walmart retail outlets across the nation.
In short order, the Democratic Party, with its hardcore union base, has climbed aboard the Fight for Fifteen express. The party platform at this year’s party convention in Philadelphia included an endorsement of a $15 an hour national minimum wage. Around that time, President Obama expressed support for the Washington, D.C. local government’s passage of a bill to raise its minimum wage to $15 an hour: “I commend the District of Columbia, Mayor Muriel Bowser and the Council of the District of Columbia for raising the District’s minimum wage.” This was a quantum leap from his earlier appeals in 2013 and 2014 to raise the federal minimum wage, respectively, to $9 and $10 an hour, and his executive order in January 2015 that raised the rate to $10.10 an hour for employees covered by federal contract.
Presidential nominee Hillary Clinton, who for the last few years has sought a rise to $12 an hour, announced during a campaign stop in New York this April that if $15 an hour minimum wage legislation was placed on her desk, she would sign it. In her convention acceptance speech, she declared: “If you believe the minimum wage should be a living wage – and no one working full time should have to raise their children in poverty – join us.” Even Republican presidential nominee Donald Trump, though not endorsing a $15 an hour minimum wage, has backed away from his earlier opposition to a hike of any kind. This May, Trump said that he is “open to doing something” about the current $7.25 an hour minimum.
If there is one political figure who shifted this juggernaut into high gear, it is Senator Bernie Sanders, I-Vt. Sanders gave a Mrs. Clinton a good scare during primary season, in the process coaxing her ever further leftward. He already had established himself as the movement leader last year. On July 22, 2015, Sanders introduced legislation, the Pay Workers a Living Wage Act (S.1832), that would raise the federal minimum wage to $15 an hour over a four-year period. He defended his bill with evangelical fervor during a rally outside the U.S. Capitol: “It is a national disgrace that millions of full-time workers are living in poverty and millions more are forced to work two or three jobs just to pay their bills,” he bellowed. “In the year 2015, a job must lift workers out of poverty, not keep them in it. The current federal minimum wage of $7.25 an hour is a starvation wage and must be raised to a living wage.” In addition to more than doubling the general minimum wage, the measure also would raise the standard rate for restaurant and other tipped employees from the current $2.13 an hour to $3.15 an hour. A group of House members, including Rep. Keith Ellison (D-Minn.), Raul Grijalva (D-Ariz.) and Sheila Jackson-Lee (D-Tex.), introduced companion legislation that same day.
The roster of governments adopting the $15 an hour standard, meanwhile, has grown since the City of Seattle, preceded by nearby SeaTac, adopted it a couple of years ago. Greensboro, Los Angeles, Pittsburgh, Rochester, San Francisco, Syracuse and Washington, D.C., plus the smaller cities of Emeryville and Mountain View (both in California), Milwaukie (Oregon), Missoula (Montana) and San Marcos (Texas), each have enacted ordinances phasing in that rate. In some cases, such as Pittsburgh and Syracuse, the hike applies only to municipal employees; in others, like Los Angeles, Seattle and Washington, D.C., it applies to all employees. Los Angeles County also has approved a $15 an hour minimum wage. On a state level, New York and California, early this June, within hours of each other, passed $15 an hour minimum wage legislation set to take full effect, respectively, in 2021 and 2022. The rates for these states before passage were $9 and $10 an hour. Thus, roughly 60 million Americans, close to a fifth of the nation’s population, currently live in jurisdictions where a $15 an hour minimum wage is being phased in.
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