Unions Back Wage Hike

Report: Minimum wage increases trigger raises in union contracts

February 15, 2013

President Barack Obama’s proposal to increase the minimum wage will give a boost to union members who already earn more than the current federal minimum of $7.25 an hour.

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.

A union spokeswoman did not return requests for comment.

CUF combed collective bargaining contracts on the Department of Labor website and found numerous contracts with provisions for renegotiation or automatic increases of  between 15 and 50 cents per hour.

The group also found 2004 contracts negotiated by the Union of Needletrades, Industrial, and Textile Employees included mandates that members be paid 15 percent higher than the minimum wage. Such a provision could yield a worker at least $10.35 an hour under Obama’s proposed wage hike.

Wilson said the research is incomplete since the department archived contracts are submitted voluntarily and are oftentimes expired.

Several labor officials told the Washington Free Beacon that such provisions are widespread in the retail and service industries.

"That’s common in our contracts because we want to make sure we give more to our members," said Brigid Kelly, spokeswoman for the United Food and Commercial Workers Local 75.

Unions have had mixed success in attaining these higher wages in service industries. Unionized food service employees have median weekly salaries that are $100 higher than non-union workers, but organized retailers earn only $8 more per week, according to the Bureau of Labor Statistics.

UFCW 75 represents 30,000 retail workers and grocers at large chains including CVS and Kroger in Ohio. Kelly said a minimum wage increase could have major impacts on the union’s upcoming negotiations with Kroger for expiring contracts in Toledo and Cincinnati.

"Bargaining a good contract is never easy," she said. "We’re fortunate in our local that we have two major contracts that expire this year. If there is an increase, that’s going to help us work everything else around."

While Obama’s minimum wage announcement surprised political observers, Kelly said it fulfilled the promises he made to workers in Ohio during numerous campaign stops in 2012.

"Everyone was looking for or hoping for something in his speech about good middle class jobs, so it was a welcome surprise," she said.

However, Wilson said, Obama is targeting his union base.

Wilson noted that economists agree that rising labor costs lead to higher unemployment, especially among teens.

"For years there has been an odd situation where unions would fight for minimum wage increases, despite the fact that their members made over minimum wage," Wilson said. "These provisions give the first indication as to why unions are invested in raising the minimum wage."