Some comeuppance for Big Labor on the minimum wage
Tax reform passed in Congress Wednesday and almost simultaneously, two big banks, Fifth Third and Wells Fargo, hiked their minimum wage for their workers to $15 an hour.
Seems tax cuts outperform years of union braying and political muscle to effectively secure wage rises for workers.
Which pretty well shows in a nutshell what workers really need to obtain rising standards of living.
Because since about 2011, the far left, led by the SEIU and public union crowd, has been loudly preaching about the importance of raising the minimum wage, the moral imperative of getting it done, the rightness of the cause, and the supposed wicked plutocratic “greed” of any business that opposed it, spending $70 million to do it. It was a strange cause for unions to be taking up, because union workers typically make more than non-union workers already.
The real idea of course, was not to raise worker standards, but, in an era when no one wants to join and be ordered around by a union, to bankrupt non-union competition.
It really happened this way. According to a report in the Los Angeles Times, when unions forced the city to raise the hotel tax and minimum wage:
Under an obscure provision of the city's wage hike, unionized hotels were granted an exemption allowing them to pay their employees less. The result is that Martinez, who pays $56.50 every month for membership in the hotel workers union Unite Here, now makes less than those doing the same job in non-union workplaces.
"That's what really makes me mad," Martinez said. "I just wanted to be treated equal. Don't exempt us, because we're the ones paying union dues."
That’s right, unions cheated their own workers.
The Times reported that the idea was to fill their own coffers with union membership dues.
Critics see such provisions as a cynical collusion between politicians and big-city labor interests. By making unions the "low-cost option" for businesses seeking to avoid paying better wages, they assert, the exemptions are designed to drive up union membership — and revenue from dues — at the expense of workers.
Meanwhile, as economist Ed Renzi points out in an excellent piece: Unions favor minimum wage hikes even with union workers because of clauses in their contracts that hike pay scales across the board when the minimum wage is raised. Legislation to raise wages sure beats picketing for the same thing.
And as their minimum wage hike demands caught on – with Jerry Brown, Occupy Wall Street, other blue state governors and legislatures, plus the reliably progressive press – Big Labor managed to bankrupt a whole lot of other business startups in the process as Seattle’s and San Francisco’s restaurant workers can tell you.
So much for union propaganda that it's unions that act in workers' interests.
Now that tax cuts have passed, against union objections, something amazing has happened: Companies are raising worker salaries.
Turns out the monstrous tax regime was the real culprit in keeping worker wages stagnant. A chain reaction of wage hikes has forced wages to rise on their own for workers, freeing up decades of stagnant wage growth.
So much for the argument that employers hold down wages because they are mean-spirited. Actually, employers love to raise wages – because it attracts and retains the best workers. With unemployment forecast to dip below 4% by current trends, it’s going to be tight in the coming Trump boom and businesses are going to be competing for labor. Raise the wage and employees will stay put.
That makes the labor market a seller’s market, meaning, workers are going to have the edge and it’s already started.
No union is going to be able to claim credit for that one.