Unions love raising the minimum wage, so long as they are exempt.
A new report, “Labor’s Minimum Wage Exemption,” by the U.S. Chamber of Commerce found many labor unions are exempt from the various local minimum wage laws they support for everyone else.
“Not all minimum wage increases come in the same form,” the report notes. “Some local ordinances in particular include an exemption for employers that enter into a collective bargaining agreement with a union.”
The report explains that these sort of “escape clauses” are often designed to encourage unionization because they make membership a low cost alternative for employers. This, explains the report, raises questions about who these minimum wage laws are actually meant to help.
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The report cites the experience of one union after the city of Los Angeles included an exemption for unions when they raised the minimum wage for the hotel industry.
“Local 11’s membership increased from 13,626 in 2007 to 20,896 in 2013,10 while its revenue increased from approximately $7.5 million per year to nearly $12.7 million,” the report details.
The same thing happened for UNITE-HERE Local 2 when San Francisco passed a minimum wage ordinance with a union exemption in late 2003.
Another notable example is when the city of SeaTac, Washington passed a living wage ballot initiative in 2013, known as Proposition 1. At the time the initiative established the highest minimum wage rate in the country of $15 per hour with an annual adjustment for inflation.
Proposition 1 also included an exemption for unions. The report explained, “Supporters of Proposition 1 spent more than $1.7 million, with union spending accounting for 98.4% of that amount.”
San Francisco’s move to raise its minimum wage to $10.55 per hour, which gained national attention, also included an exemption for unions.
According to the report, minimum wage laws passed in Oakland, San Jose, Long Beach, Milwaukee County and Chicago all included an exemption for unions.
“Many advocates for a higher minimum wage portray it as a means of improving the lives of workers, putting more money into the economy, and increasing growth,” the report concluded. “So, it is surprising that some minimum wage ordinances include an exemption that potentially undermines all three goals.”
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