Unions Got Some 'Splaining to do on Minimum Wage Flop

Ricky Ricardo used to tell his television wife, “You’ve got some ‘splaining to do, Lucy,” after some madcap misadventure with sidekick Ethyl went horribly wrong, as it always did, on the long-running comedy, “I Love Lucy.”

But today it’s a pair of lavishly-funded union front groups who have some ‘splaining to do now that their policy victory in the suburbs of Seattle is hurting the workers it was intended to help.

Voters in SeaTac, Washington voted to raise their city’s minimum wage to $15 per hour, the first city in the country to raise their base wage that high, giving unions and the “worker center” front groups they fund their first victory in their “Fight for 15.”

In this photo taken, Aug. 1, 2013, demonstrators protesting what they say are low wages and improper treatment for fast-food workers march in downtown Seattle. (AP Photo/Elaine Thompson, File) 

The higher wage took effect at the beginning of the year and now we’re seeing the after-effects for the first time. And they are not good.

The blog UnitedLiberty.org flagged a Seattle Times story about the economic impact of forcing businesses to rapidly absorb significantly higher labor costs. From the Times:

“At the Clarion Hotel off International Boulevard, a sit-down restaurant has been shuttered, though it might soon be replaced by a less-labor-intensive café … Other businesses have adjusted in ways that run the gamut from putting more work in the hands of managers, to instituting a small ‘living-wage surcharge’ for a daily parking space near the airport.”

Let me see, where have we heard about businesses closing, jobs being lost and prices going up? It rings a bell.

Oh, right: everyone who opposed this massive increase in the minimum wage predicted exactly that!

The aforementioned blog also highlighted an article in the Northwest Asian Weekly that is worth quoting at length, because the wreckage of the wage boost is now even hurting the workers who haven’t yet lost their jobs [emphasis added]:

"Are you happy with the $15 wage?" I asked the full-time cleaning lady.

"It sounds good, but it’s not good," the woman said.

"Why?" I asked.

"I lost my 401k, health insurance, paid holiday, and vacation," she responded. "No more free food," she added.

The hotel used to feed her. Now, she has to bring her own food. Also, no overtime, she said.

She used to work extra hours and received overtime pay. What else? I asked. "I have to pay for parking," she said.

I then asked the part-time waitress, who was part of the catering staff.

"Yes, I’ve got $15 an hour, but all my tips are now much less," she said.

Before the new wage law was implemented, her hourly wage was $7. But her tips added to more than $15 an hour. Yes, she used to receive free food and parking. Now, she has to bring her own food and pay for parking.

This utterly predictable news comes as the city of Seattle is poised to enact their own $15 per hour minimum wage for all workers in the city and as the union-funded front groups ratchet up their demands for a $15 wage and stage noisy protests at the annual meetings of companies like McDonalds and Walmart.

The Chicago Tribune recently reported that the Service Employees International Union (SEIU) spent more than $2 million of its members dues money to fund the Restaurant Opportunity Center (ROC), a so-called “worker center” that the union uses to skirt rules pertaining to union organizing. The United Food and Commercial Workers (UFCW) union spends freely on another outfit called OURWalmart, trying to push unionization more deeply into the retail sector.

Demonstrators in support of fast food workers protest outside a McDonald's as they demand higher wages and the right to form a union without retaliation Monday, July 29, 2013, in New York's Union Square. Activists say hundreds of workers have walked off their jobs. They are demanding a minimum wage increase and calling for better benefits. (AP Photo/John Minchillo) 

At first blush it would seem wasteful to spend so much of their members’ dues money on public relations noise-making that would only benefit workers who are not members of their unions; but if you look at things the way the union bosses look at them, the motive for the spending is clear.

[sharequote align="center"]If you look at things the way the union bosses look at them, the motive for the spending is clear.[/sharequote]

Most of the contracts negotiated by the SEIU and the UFCW contain clauses that require pay hikes commensurate to any increase in the minimum wage. And a funny thing happens when unionized workers pay goes up: they pay more dues to the union bosses.

So, these cynical union bosses couldn’t really care less if some non-union worker in SeaTac loses their job when a restaurant closes. And the labor bosses care nothing for the fact that employees are now literally having food taken out of their mouths. Nope, it doesn’t really matter, so long as the union bosses take their huge cut.

For decades liberal and conservative economists and policymakers have endlessly argued whether a big increase in the minimum wage reduces employment and hurts many of those it intended to help.

We have a chance to settle the argument once and for all: allow Seattle go forward with its experiment in economic self-destruction, joining its nearby suburb at $15 per hour. And let the rest of the country hit the pause button on the minimum wage debate. Give it a year or so, and let’s watch what happens.

The outcome is easy to predict: It will be the union bosses who will have the ‘splaining to do.

Fred Wszolek is a spokesperson for the Workforce Fairness Institute (WFI)

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