Union Activists Sign on to Pro-Minimum-Wage-Hike Bill

Many unions would benefit from bump to the minimum wage

President Barack Obama, AFL-CIO president Richard Trumka / AP
January 14, 2014

A letter supporting a minimum wage hike being circulated by the George Soros-funded Economic Policy Institute that purports to represent the views of leading academics has been signed by a number of economists who work for labor unions and leftwing special interest groups.

In-house economists for the AFL-CIO, Service Employees International Union, and liberal, labor-aligned groups such as Center for American Progress, Institute for Women’s Policy Research, Center on Budget and Policy Priorities, and the Center for Economic and Policy Research all signed onto the letter, which was touted as proof that the proposed $10.10 minimum wage would serve as a panacea for slumping wages.

"At a time when persistent high unemployment is putting enormous downward pressure on wages, such a minimum-wage increase would provide a much-needed boost to the earnings of low-wage workers," the letter says.

Michael Saltsman, research director for the Employment Policies Institute, said that a form letter signed by like-minded academics does little to alter economic realities. He pointed to hundreds of studies that show that minimum wage hikes hamper employment, especially for younger and less skilled workers.

"You have a lot of folks who are either union groups paid to feel this way or they’re supporting this for ideological reasons, rather than academic reasons," he said. "The unfortunate thing is that it leaves less skilled and younger workers footing the bill."

Unions will reap huge benefits from raising the minimum wage: many service industries, such as SEIU and hospitality labor group UNITE HERE tie union wages to base line wages. If the minimum wage increases by 40 percent, union workers could see similar pay bumps.

As a result, many of these union-friendly groups are heavily pushing for the 40 percent increase proposed by Sen. Tom Harkin (D., Iowa) and championed by President Barack Obama.

"This PR stunt doesn’t really change the fact that the vast majority of research on minimum wage points to job loss," said Saltsman. "That research has stood solidly against political opponents for all these years."

This is not the first time the Economic Policy Institute has used the ideological leanings of economists to create the appearance of consensus about political issues. The group issued a similar letter in 2011 from economists endorsing card check legislation that would eliminate secret ballots in union elections. One-third of the economists who appeared on the minimum wage letter also signed the card check letter.

"There’s nothing really economic about card check—it’s a political issue, which shows that these are economists who aren’t necessarily supporting these things because they’ve studied the economics," Saltsman said. "They’re supporting these things because they’re Democrats and they like the policy politically."