Lawmakers are using wage laws to force employers to accept unions, according to a new report.
Maxford Nelsen, a Washington-based labor policy expert at the Freedom Foundation, explored the loopholes that Democrats are writing into "living wage" bills to encourage union expansion. Nelsen writes in the Wall Street Journal:
Los Angeles became the latest to join the movement when the city council approved a law on Sept. 24 requiring large hotels to pay employees at least $15.37 per hour and provide generous paid sick-leave benefits. But the ordinance includes a provision, increasingly common in similar ordinances, that permits unions to waive the requirements in collective bargaining.
This waiver enables labor organizers to approach a nonunion employer struggling to pay the new minimum with the following offer: assist them in unionizing employees by signing a "neutrality agreement," in return for which the union will use the collective-bargaining waiver to allow the employer to pay less than the new statutory minimum…
Such deals may be good for the union and better than the alternative the employer faces, but workers lose their right to determine whether to unionize in a secret ballot election. And the living-wage ordinance is exposed as a cynical political ploy.
Democrats have also used living wage bills to hurt businesses and industries that have resisted unionization.
Seattle’s recent minimum wage law, for example, offers special exemptions for small business owners to phase in the $15/hour minimum wage over a period of seven years. Locally-owned franchises, however, are singled out to raise their wages within three years—the same deadline that applies to large employers.
Franchise owners generally would fall under the umbrella of small business: the majority make about $50,000 every year and one in four earn less than $25,000. The International Franchise Association (IFA) is suing the city to challenge the law.
"Basically, you’re raising the labor costs for a small business owner who happens to operate under Subway so that they can’t compete with another sandwich shop down the street," IFA spokesman Matthew Haller told the Washington Free Beacon in September.
President Obama’s push to raise the $7.25 federal minimum wage to $10.10 is also seen as a boost to unions. Many labor groups in the service sector use the minimum wage to set baseline pay for their members. Boosting the minimum wage could drive up the costs of union shops, as the Washington Free Beacon reported in February 2013.
Many unions in the retail and service industries have negotiated provisions into contracts that would boost union salaries in the event of minimum wage increases, according to a study from labor watchdog Center for Union Facts (CUF).
"Some union contracts are triggered by raising minimum wage," CUF Managing Director J. Justin Wilson said. "The workers are going to get an automatic wage hikes in addition to what they would already get."
Organized labor has been a major player in the fight for higher minimum wages at both the federal and state levels.
Labor leaders have pledged to fight for the $9 minimum wage Obama proposed during his State of the Union address.
Some groups have already set up campaign infrastructure at the state level. Dozens of religious and labor groups formed Raise Maryland to increase the state’s minimum wage to $10 per hour, according to spokesman Matt Hanson.
"We’re obviously happy that President Obama is trying to raise the federal minimum to $9 an hour, but we’re focused on raising it to $10 in Maryland—we know we can’t wait on John Boehner," he said, referring to the Republican speaker of the House who vowed to fight a minimum wage hike.
The powerful Service Employees International Union Local 32BJ is a principal player in Raise Maryland. Its members may also benefit from an increase, no matter their wages. CUF identified a previous 32BJ contract that guaranteed Maryland workers pay that is at least 50 cents higher than statutory minimum wage.