Fight for $15: Who Wins in the Long Run? - CUE, Inc.
  • Fight for $15: Who Wins in the Long Run?

Does big union win with ‘Fight for $15’?dollar-signs-black

Good Op Ed piece from the Chamber of Commerce this morning with some points of irony mixed with some good facts.

California has enacted a statewide $15 hourly minimum wage that begins to phase in next year, before taking full effect in 2022. The economic merits of such an increase are certainly in question, and according to the New York Times, even liberal economists worry about “a potential loss of jobs in a number of cities.” Indeed, even Gov. Jerry Brown went as far as to say at the signing ceremony that the fundamental economics of a minimum wage “may not make sense.” Nonetheless, the group claiming credit for the increase, the so-called Fight for $15 movement, is declaring victory, and the wage increase will surely be a major talking point in Fight for $15’s next round of street theater demonstrations, set for today.

There have been several rounds of these demonstrations over the past few years, particularly in cities like Los Angeles and Oakland. While they have generated a fair amount of media attention, they have been far less successful at producing actual striking workers, who are allegedly the backbone of the movement.

Press releases trumpet the hundreds of cities that will see massive Fight for $15 protests, but outside of a few major cities, no more than a handful of demonstrators show up, and some targeted locations see no demonstrations at all. The reason for that is simple: Rather than being a genuine grass-roots uprising, the Fight for $15 movement is actually a front for the Service Employees International Union, which is engaged in a campaign to unionize the fast-food industry.

Which leads to the question: is California’s wage increase really a win for the SEIU?

From a pure political perspective, one might say yes. It demonstrates that unions have a lot of clout in Sacramento, which isn’t exactly news. But when one remembers the slogan SEIU’s demonstrators chant at their protests: “$15 and a union,” the answer becomes less clear. In fact, in the three years since SEIU began protesting outside fast food restaurants, not a single union representation petition has been filed at any of them.

That matters, because these protests – indeed, the whole Fight for $15 movement – isn’t free. It’s costing the SEIU a lot of cash. According to financial reports filed with the Department of Labor, the SEIU has spent approximately $55 million of its members’ dues money on Fight for $15. Since it started spending, SEIU’s membership has actually gone down, not up.

SEIU’s dues payers may be getting antsy about spending so much money on a campaign that has done nothing to increase the organization’s bottom line. According to a report in Bloomberg, SEIU veterans worry about “the continued outlay for minimum-wage protests on behalf of non-union workers in light of the decline in dues-paying memberships.”

Even a former SEIU president has said that the union “can’t just keep transferring revenue it makes from bargaining contracts to pay for its social justice work.” After all, one must remember that unions are a business, funded by dues. Throwing more than $50 million out the door without a return on investment in terms of new members is clearly not a sustainable business practice.

There’s more than a bit of irony in the SEIU pushing for a $15 minimum wage. Because the union actually agrees to contracts that pay workers far less than that. Indeed, a quick search online for SEIU bargaining agreements turns up many that pay as low as $9.75 cents an hour. Yet, this is described as a “poverty wage” in SEIU’s political manifesto.

The SEIU would undoubtedly claim that they negotiated the best wage they could in a particular industry or region, and that the market simply wouldn’t bear more than that for certain jobs. Of course, that wouldn’t make for a very catchy slogan. But California’s Legislature might have better served the state if they had noted that point.

Glenn Spencer is vice president of the Workforce Freedom Initiative at the U.S. Chamber of Commerce. To learn more, visitwww.workforcefreedom.com.