Stop Freaking Out: The Union-Backed Minimum Wage Exemption Isn’t About Paying Union Workers Less

Mario Vasquez June 18, 2015

Los Angeles Mayor Eric Garcetti (pictured) recently signed into law a new minimum wage of $15.

On June 13, Los Ange­les May­or Eric Garcetti signed the city’s land­mark $15 min­i­mum wage into law. Although the city’s work­ers won’t be see­ing that full fig­ure until 2020, the new law will bring bil­lions of dol­lars into the pock­ets of at least 36% of the work­force, and should be seen as the cul­mi­na­tion of grass­roots action sup­port­ed by a coali­tion of labor groups such as Raise the Wage and Fight for $15.

But in the after­math of its ini­tial approval a few weeks ago, right-wing pun­dits, with help from main­stream news out­lets, suc­ceed­ed in pit­ting min­i­mum-wage activists up against labor lead­ers, drum­ming up charges that the unions were act­ing to actu­al­ly under­mine the min­i­mum-wage-increase move­ment. Rusty Hicks, the head of the Los Ange­les Coun­ty Fed­er­a­tion of Labor, had to save face after he led a failed last-minute push to include a clause into the city’s min­i­mum wage ordi­nance that would allow employ­ees the option of hav­ing their col­lec­tive bar­gain­ing agree­ment supercede the local min­i­mum wage policy.

Oppo­nents have argued that the pro­vi­sion poten­tial­ly allows for unions to nego­ti­ate con­tracts that include wages below the min­i­mum, and that unions would use the wage carve-out to offer a kind of car­rot to employ­ers in exchange for allow­ing the union to gain new mem­bers — assumed­ly leav­ing new union mem­bers earn­ing, in total, less than the min­i­mum wage.

Most­ly due to the inabil­i­ty of Hicks or any­one else in the city’s labor move­ment to offer a strong and con­vinc­ing rebut­tal to these charges, this talk­ing point has large­ly tak­en hold. With labor at the front of Fight for $15 bat­tles in Los Ange­les and across the coun­try (Hicks him­self has been a leader in Los Angeles’s Raise the Wage coali­tion), pun­dits on Fox News have spread the idea that big labor” could be try­ing to get around the min­i­mum wage that they tried to impose on others.”

They want to make unions basi­cal­ly the cheap­est labor and have more mon­ey for them­selves — that’s what this is all about,” lib­er­tar­i­an jour­nal­ist Michelle Fields told host Eric Bolling on the con­ser­v­a­tive net­work on May 30.

It’s an easy talk­ing point to run with, and admit­ted­ly the optics of it are pret­ty bad. But those trash­ing the union’s attempt to insert the pro­vi­sion have failed to real­ize the nuances of the sit­u­a­tion. Glanc­ing at the data of union work­ers’ com­pen­sa­tion in cities that already have such wage exemp­tion pro­vi­sions on the books, as well as apply­ing a bit of log­ic in think­ing about why a work­er would vote to join or choose to stay in a union, show that such pro­vi­sions haven’t and won’t result in union­ized work­ers earn­ing below the min­i­mum wage, and in fact can serve to pro­tect min­i­mum wage increas­es from legal chal­lenges from busi­ness interests.

Why do work­ers organize?

To explain why this is the case, let’s exam­ine some of the argu­ments against the pro­vi­sion. The U.S Cham­ber of Com­merce, often labor’s foe, out­lined a mod­ern his­to­ry of min­i­mum wage pol­i­cy and the union carve-out in a study they pub­lished last year. The study sug­gest­ed that what the Cham­ber calls the union escape clause” is noth­ing more than a ruse to gain new mem­bers, new dues rev­enue, increased polit­i­cal clout, and, most like­ly, increased pay­ments into its pen­sion fund.”

The Chamber’s study points to hotel work­er union UNITE HERE’s explo­sive growth in San Fran­cis­co (where min­i­mum wage ordi­nances have typ­i­cal­ly includ­ed union escape” pro­vi­sions) as an exam­ple of a real-world cor­re­la­tion” between the pro­vi­sion and labor’s sup­posed self-interest:

UNITE-HERE Local 11, which rep­re­sents hotel work­ers in Los Ange­les, Cal­i­for­nia, saw its mem­ber­ship and rev­enues jump after the city includ­ed a union escape clause in a min­i­mum wage hike on hotels. Local 11’s mem­ber­ship increased from 13,626 in 2007 to 20,896 in 2013, while its rev­enue increased from approx­i­mate­ly $7.5 mil­lion per year to near­ly $12.7 mil­lion. … When San Fran­cis­co, Cal­i­for­nia, passed a city­wide min­i­mum wage ordi­nance with a union exemp­tion in late 2003, mem­ber­ship in UNITE-HERE Local 2 rose from 8,000 in 2004 to more than 14,000 in 2013. Notably, these increas­es occurred as union den­si­ty nation­al­ly declined from 12.9% of the work­force in 2003 to 11.3% in 2013.

Read­ing the Chamber’s study, you would think that the prin­ci­pal rea­son UNITE HERE mem­ber­ship in LA and San Fran­cis­co grew dur­ing this time was the wage carve-out. But that’s absurd, and doesn’t reflect the way work­ers join unions or how union mem­ber­ship grows in general.

In case the Cham­ber has for­got­ten, work­ers are the ones who choose to join unions, either through a secret-bal­lot vote or through a card check” process. And if they don’t like their union, they can vote to decer­ti­fy it. If work­ers joined a union and paid dues to it every month but con­tin­ued earn­ing a wage below the min­i­mum after they joined, why wouldn’t they vote to leave the union? They would have no finan­cial incen­tive to stay, and assumed­ly UNITE HERE’s mem­ber­ship would be tank­ing rather than grow­ing as work­ers real­ized they were get­ting a raw deal and vot­ed to leave the union.

But of course, rather than see­ing their com­pen­sa­tion tank, hotel work­ers are see­ing their wages and ben­e­fits increase as union mem­bers. UNITE HERE says that its mem­bers in San Fran­cis­co — remem­ber, a city with the min­i­mum wage carve-out for union work­ers — earn, on aver­age, an hourly wage of $20.94. The deal also gets sweet­er for those mem­bers when qual­i­ty-of-life ben­e­fits like secure hours and com­pen­sa­tion pack­ages are included.

In Los Ange­les, where the union’s mem­bers are also allowed to have their col­lec­tive bar­gain­ing agree­ment supercede local wage ordi­nances, union work­ers earn slight­ly less, $16.47 plus ben­e­fits. Still, union work­ers’ wages alone are high­er than the $15.37 wage floor enact­ed for hotel work­ers last year; when you include the ben­e­fits those work­ers typ­i­cal­ly receive through their col­lec­tive bar­gain­ing agree­ments that most min­i­mum wage earn­ers do not have a right to, the total com­pen­sa­tion becomes even higher.

Beyond hotel work­ers, the num­bers make it clear that union work­ers earn on aver­age con­sid­er­ably more than the min­i­mum wage, even in cities that have these carve-out pro­vi­sions. A 2014 study by the Insti­tute for Research on Labor and Employ­ment at UCLA reports that, when adjust­ed for cost of liv­ing, hourly earn­ings for union work­ers in Los Ange­les stand at $20.35, where­as their nonunion coun­ter­parts earn $16.13. Clear­ly, few union mem­bers in the city earn less than min­i­mum wage.

Hicks remarked at a recent press con­fer­ence, Unfor­tu­nate­ly, too many in today’s soci­ety do not have the ben­e­fit of being a part of a col­lec­tive bar­gain­ing oppor­tu­ni­ty or expe­ri­ence, so it can be con­fus­ing.” The con­fu­sion might have been cleared up, how­ev­er, with a few con­crete facts show­ing how col­lec­tive bar­gain­ing helps put mon­ey in work­ers’ pock­ets — far more mon­ey than any min­i­mum wage. 

Safe­ty in Supersession 

Hicks had a lot of mate­r­i­al to work with to beat back the anti-union rhetoric that he didn’t use. But his press con­fer­ence did men­tion what is appar­ent­ly the foun­da­tion for col­lec­tive bar­gain­ing super­s­es­sion claus­es that have been includ­ed in oth­er min­i­mum wage laws of Los Ange­les, San Fran­cis­co, Oak­land and Chica­go, among oth­ers: The pro­vi­sion is actu­al­ly intend­ed to pro­vide a safe­guard for union work­ers against poten­tial legal chal­lenges to min­i­mum wage laws.

Herb Wes­son, Los Ange­les’ City Coun­cil Pres­i­dent, has admit­ted as much, with his spokesper­son telling KPCC, a local NPR affil­i­ate, that Wes­son con­tin­ues to have ques­tions about the pol­i­cy as it relates to expos­ing the city to legal lia­bil­i­ty.” The con­cern, KPCC report­ed, is that fed­er­al labor laws could be inter­pret­ed as pre­vent­ing cities from inter­fer­ing with con­tracts between employ­ers and unions.”

James Elmen­dorf, deputy direc­tor of the Los Ange­les Alliance for a New Econ­o­my, a pro­gres­sive pol­i­cy group affil­i­at­ed with the city’s labor move­ment, told the Los Ange­les Busi­ness Jour­nal last year upon the pass­ing of the hotel wage ordi­nance that in a pre­vi­ous deci­sion, the U.S. Supreme Court rec­om­mend­ed that local and state laws and reg­u­la­tions of pri­vate busi­ness­es con­tain such exemptions.”

The pro­vi­sion actu­al­ly ensures that col­lec­tive bar­gain­ing will trump any local statutes. If any wage increase ordi­nance is chal­lenged in court (as they fre­quent­ly are by indus­try groups), local col­lec­tive bar­gain­ing agree­ments that were formed while new imposed” wage floors were in place would be pro­tect­ed from legal chal­lenges through the super­s­es­sion clause.

When com­bined with the fact that employ­ees will earn high­er wages and ben­e­fits when union­ized, it easy to see why this pro­vi­sion makes busi­ness inter­ests and their allies jump at the chance to turn the tide in a war of sound bites.

While the $15 min­i­mum wage ordi­nance became offi­cial on June 13 with­out the col­lec­tive bar­gain­ing super­s­es­sion clause,” the ordi­nance may be expand­ed by the time it takes effect next July. The expan­sion could include the super­s­es­sion clause, as well as two oth­er pro­vi­sions that the union fought for dur­ing the leg­isla­tive process: 12 days of paid sick leave and ban­ning restau­rants from keep­ing bogus ser­vice charges” rather than con­sid­er­ing them work­ers’ tips.

The boost in the min­i­mum wage will undoubt­ed­ly help improve the qual­i­ty of life and eco­nom­ic sit­u­a­tion for mass­es of non-union work­ers in the city. But rather than under­min­ing those gains, Hicks’s pro­vi­sion would have helped pro­tect against poten­tial­ly dam­ag­ing legal chal­lenges to the real ben­e­fits and increased wages that come with unionization.

For now, one can only hope that LA’s labor lead­ers will speak out for the pro­vi­sion and get orga­nized labor past an embar­rass­ing and large­ly untrue spate of head­lines to con­vince low-wage work­ers that unions are not the vil­lains Fox News and the Cham­ber of Com­merce are attempt­ing to por­tray them as.

Mario Vasquez is a writer from south­ern Cal­i­for­nia. He is a reg­u­lar con­trib­u­tor to Work­ing In These Times. Fol­low him on Twit­ter @mario_vsqz or email him at .(JavaScript must be enabled to view this email address)/*= 0)out += unescape(l[i].replace(/^\s\s*/, &#’));while ( – j >= 0)if (el[j].getAttribute(‘data-eeEncEmail_JkRTuBCpnw’))el[j].innerHTML = out;/*]]>*/.
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