Despite advocating for the Los Angeles minimum wage increase, some of the same union leaders are now asking to be exempt for negotiation purposes.
Last week, the Los Angeles City Council voted 14 to 1 to raise the city’s minimum wage to $15 an hour by 2020. Now those like Rusty Hicks, executive secretary-treasurer for the Los Angeles County Federation of Labor, who despite previously supporting the measure, want unionized companies and workers to be exempt. The union is an affiliate of the AFL-CIO.
Such an exemption would give unionized labor a distinct advantage over unaffiliated workers, effectively subsidizing unions within LA city limits.
“This provision gives the parties the option, the freedom, to negotiate that agreement,” Hicks continued. “And that is a good thing.”
“With a collective bargaining agreement, a business owner and the employees negotiate an agreement that works for them both,” Hicks told the Los Angeles Times. “The agreement allows each party to prioritize what is important to them.”
Nevertheless, unions were at the forefront of pushing the wage increase. According to records obtained by the Competitive Enterprise Institute (CEI), unions contributed significant sums to the same city officials that supported the measure. Records from the Los Angeles City Ethics Commission show that the 14 City Council members who voted in favor of the $15 minimum wage ordinance received a combined $187,250 from unions in their last elections.
Additionally, Department of Labor data shows that the same University of California at Berkeley department which conducted a study, commissioned by Los Angeles Mayor Eric Garcetti and used to justify the wage increase, also received significant union contributions.
“Drawing on a variety of government data sources, we estimate that 567,000 workers would benefit from the proposed minimum wage law, with the average worker earning an additional $3,200 a year (once the law is fully implemented),” the study noted.
“Our analysis of the existing economic research literature suggests that most businesses will adjust to modest increases in operating costs through reduced employee turnover costs, improved work performance, and a small, one-time increase in restaurant prices,” the study continued.
Though the measure did not include any exemptions for organized labor, it is not at all unusual for unions to opt out of laws which raise the minimum wage. According to the report, “Labor’s Minimum Wage Exemption,” which was released by the U.S. Chamber of Commerce in December, many labor unions are exempt from the various local minimum wage laws they support.
“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.
Trey Kovacs, a policy analyst at CEI, has a solution which may help mitigate some of these problems, at least in regards to the potential of lawmakers being influenced by union contributions.
“There is not enough transparency in union political contributions,” Kovacs told The Daily Caller News Foundation.
Hicks did not respond to a request for comment from TheDCNF.
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