May 28, 2015
Los Angeles Labor Unions Want Exemption From $15 Minimum Wage

Labor unions which helped push through a $15 minimum wage in Los Angeles are now asking for an escape clause from that same new regulation.

The city council voted 14-1 on May 19 in favor of hiking the minimum wage from $9 to $15 by 2020. There are a few additional procedural steps ahead, but final approval of the minimum hourly wage is a near certainty, as it also enjoys the support of Mayor Eric Garcetti, and the city attorney has already drafted the language of the new ordinance. In the immediate aftermath of the vote, the mayor said that "help is on the way for the 1 million Angelenos who live in poverty."

Apparently organized labor is apparently having second thoughts about the $15 minimum wage, the Los Angeles Times reports.

"Labor leaders, who were among the strongest supporters of the citywide minimum wage increase approved last week by the Los Angeles City Council, are advocating last-minute changes to the law that could create an exemption for companies with unionized workforces... Rusty Hicks, who heads the county Federation of Labor and helps lead the Raise the Wage coalition, said [last] night that companies with workers represented by unions should have leeway to negotiate a wage below that mandated by the law..."
In the run-up to the city council vote, unions apparently opposed any provisions that would allow other businesses, such as restaurants, to pay a sub-minimum wage to their workers. Leveling what amounts to a charge of hypocrisy as well as an ulterior motive, an executive with the Los Angeles Chamber of Commerce, which opposed the minimum wage increase, insisted that "the change sought by labor officials could pressure companies into letting employees unionize as a way to seek relief from the mandated wage hike."

Lawmakers in the city apparently benefited from union cash in their political campaigns, The Daily Caller claimed. "Records from the Los Angeles City Ethics Commission show that the 14 City Council members who voted in favor of the $15 minimum wage ordinance received a combined $187,250 from unions in their last election. Additionally, Department of Labor data shows that the same University of California at Berkeley department which conducted a study, commissioned by Los Angeles Mayor Eric Garcetti and used to justify the wage increase, also received significant union contributions."

Politics aside, a government-imposed hourly minimum, whether now set at $15, $10.10, or at another benchmark, was originally designed as an entry level pay grade rather than an endpoint. In the normal course of things, minimum wage employees — and this generally applies to a younger cohort — pick up work experience and new skills and get promoted to higher paying positions or land at another company that offers better opportunities. On the other hand, in contemporary society, most would agree that an hourly pay rate needs to be high enough, for example, to incentivize some portion of the population to get off public assistance and permanently enter the workforce.

Whether $15 is about right, still too low, or too high remains to be seen, although the Seattle $15 minimum wage has reportedly already forced some eateries to go out of business. There is also a move in the fast-food industry to implement self-ordering kiosks, which would likely reduce employee headcount in the long term.

Moreover, while some unethical or unfair businesses in a variety of industries exploit their hard-working labor force with artificially low pay, a one-size-fits-all minimum wage doesn't distinguish between employers that operate in good faith, and who may be struggling to keep the doors open, and those that do not.

Do you think labor unions should be exempt from the Los Angeles $15 minimum wage?

[Photo by Spencer Platt/Getty Images News]