The Los Angeles City Council rebuffed organized labor Wednesday by rejecting, for now at least, their request to include an exception for unionized businesses in the city’s new $15-an-hour minimum wage. The wage ordinance may still be amended to include the labor exemption before it takes effect, though.
The ordinance’s passage Wednesday, even without the exemption, represented an overall victory for L.A. unions, which had pushed hard for it. A higher wage will make non-union labor, which is generally cheaper, much less economically competitive. California currently has a statewide $9-an-hour minimum wage.
The Los Angeles AFL-CIO had nevertheless lobbied the city council to include an exception allowing unionized businesses to pay their workers less than the new minimum if the workers’ labor leaders agreed to it. Advocates said those businesses needed the flexibility the exemption would provide.
Critics, including city business groups and some council members, slammed it as hypocrisy, and the council officially postponed the issue for further study. Business groups urged the council to keep the exemption out.
Rusty Hicks, executive secretary-treasurer of the L.A. AFL-CIO labor federation, did not mention the exemption request in his comments to the council, instead simply praising it for adopting the increase. “The people in this city have waited too long for this increase,” he said. A spokesman for the organization did not respond to a request for comment by the Washington Examiner.
Hicks is one of the leaders of the coalition group L.A. Raise the Wage. On its website, the coalition calls for “$15.25/hr for every full-time worker,” as well as “strong enforcement that holds all employers accountable to the law.”
The website includes a response to the criticism. It argues that providing an exemption for unionized businesses was an effort to protect workers’ rights:
[W]hen we saw the draft ordinance, we were surprised not to see a provision in the ordinance that protects workers rights. We expected the ordinance to be consistent with past City ordinances and other living wage laws that have been on the books for more than 20 years.
There’s another key piece of information that’s being left out of the conversation:
Nearly every city in California that has ever passed a local wage ordinance — Oakland, Richmond, Berkeley, San Francisco, San Jose, Sunnyvale, Ventura, West Hollywood, Santa Monica, Santa Cruz, Sacramento, Irvine, Pasadena, Emeryville and even Los Angeles — has included this provision that protects workers’ rights.
It charged that business groups were attempting to “misguide the public” to “tank a real and substantial increase in the minimum wage.”
The provision that unions are seeking, like the ones in the other cities Hicks mentioned, would exempt unionized businesses from the minimum wage ordinance, allowing them to pay the $9-an-hour state minimum, provided that the union leadership signs off.
Unions argue the the exemption is necessary to give both sides more flexibility during collective bargaining, allowing the union to trade wages for more benefits, for example.
The provision also would give nonunion businesses a strong incentive to strike a deal with union leaders and sign a collective bargaining contract on behalf of its workers. Los Angeles workers could find themselves not only not getting the increase to $15 an hour, but owing union dues on top of that.
Tim Kane, an economist with the conservative Hoover Institution, said the unions’ request was an implicit acknowledgement that even they think the increase will hurt jobs.
“It admits a lot about the negative effects of the minimum wage,” Kane said. “This is the kind of example you can teach in an economics textbook for the next four or five editions.”
–Washington Examiner
