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When Unions Take Stupid Positions

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Head in Hands

With leadership like this, it’s hard to believe the American labor movement is in decline:

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.

The push to include an exception to the mandated wage increase for companies that let their employees collectively bargain was the latest unexpected detour as the city nears approval of its landmark legislation to raise the minimum wage to $15 an hour by 2020.

For much of the past eight months, labor activists have argued against special considerations for business owners, such as restaurateurs, who said they would have trouble complying with the mandated pay increase.

But Rusty Hicks, who heads the county Federation of Labor and helps lead the Raise the Wage coalition, said Tuesday night that companies with workers represented by unions should have leeway to negotiate a wage below that mandated by the law.

“With a collective bargaining agreement, a business owner and the employees negotiate an agreement that works for them both. The agreement allows each party to prioritize what is important to them,” Hicks said in a statement. “This provision gives the parties the option, the freedom, to negotiate that agreement. And that is a good thing.”

One can make the argument that such a position makes sense for local unions, in that the idea is to incentivize employers accepting a union in return for lower wages. Except that is a terrible idea for everyone is not a union official. First, it’s not good for the actual workers, who would now be making LESS money thanks to their union representation. Not more, not equivalent, but less. Second, it undermines labor solidarity since it is providing an out for employers who don’t want to pay that wage, albeit with a significant cost. Third, the optics are just terrible. While I don’t have data, I am sure that for most activists, minimum wages are more important than unionization rates. This looks like labor selling out low-wage workers. Because that’s what they are doing. Fourth, it reinforces right-wing talking points about minimum wages. Now conservatives can say that not even unions support higher minimum wages.

Terrible.

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  • Jordan

    And not just right-wing talking points about the minimum wage, but right wing talking point about unions in general: “see, they are just about greedy/power=hungry union officials, not about helping the workers!” etc etc.

    :(

    • Ann Outhouse

      “If you don’t join the union, you get $15/hr! If you do, they pay you $10 and collect dues, too! See? Right-to-work laws are good!”

    • GoDeep

      Could there be a different angle here? Maybe some unions would prefer to trade benefits for a lower wage. They might take $10/hr plus extended family leave insted of $15/hr w/out the extended family leave. Otherwise the only incentive for such a deal would be if they were getting paid off by mgmt.

      • Jordan

        Maybe, but as the OP says there are lots of reasons not to do that and as JfL says below, if you did want to do that, this is absolutely the worst possible way to do it.

  • Ann Outhouse

    Fifth, who in their fucking mind would vote to unionize under those terms? If the law says you gotta pay $15/hr min, you’d be a moron to tick the union box on the card. And if you work for a unionized shop**, deunionize.

    “Stupid” is too kind a word, really.

    EDIT: **where wages are currently <$15

    • Ahuitzotl

      malevolently catastrophically moronic is probably still understating this. I dont get how he thought this could even be a good idea for his union officials, never mind his (rapidly disappearing) membership

  • c u n d gulag

    This has to be the stupidest thing any union leaders have ever proposed – and that’s not exactly a very short list!

    WTF are they thinking?
    Never mind.
    They’re not…

    • efgoldman

      This has to be the stupidest thing any union leaders have ever proposed

      You’re old enough to remember the stupid and non-productive NYC subway and newspaper strikes in the 1960s, aren’t you?

  • Just_Dropping_By

    First, it’s not good for the actual workers, who would now be making LESS money thanks to their union representation. Not more, not equivalent, but less.

    I’d imagine Hicks’ theory is that the workers can get other benefits by being in a union that would offset the lower wage rate (e.g., paid sick leave, employee health/dental insurance, and such), but I agree that the optics are terrible.

    • Ann Outhouse

      My theory is he’s been playing too much golf with company executives and not spending enough time out in the trenches with low-wage workers.

      • tsam

        +1000

    • Linnaeus

      That’s what I’m thinking, too. But it’s still a stupid position to take.

    • Hogan

      From his bio it looks like he’s a career political operative/staffer who moved laterally into the fed’s political operation and then up to “executive secretary/treasurer” (yikes). His background is in campaigns and policy shops, not workplaces and bargaining tables.

      • jim, some guy in iowa

        from the professional managerial class, not the working class. Explains a lot

      • LiveFreeOrShop

        Agree with Jim. There’s a sellout somewhere here, I wonder where? Maybe the grocery union explanation below (although the data don’t back up the rationale). Let’s hope Rusty is straightened out or someone at the union level rebuts.

        Jesus…

        BTW, have you read the comments at the LATimes? Wingnuts having orgasms all over each other.

  • Phil Perspective

    Rusty Hicks is an asshat. Who is this guy? Is he a mole sent by the Koch brothers? How did he get to a position of power, only to sell out his union brothers and sisters?

    • JL

      See Hogan’s link above. He didn’t really rise from the ranks (though in fairness it looks like he’s part of a faculty union somewhere?). He’s a career political operative who came straight into the union leadership as a political operative.

      • Hogan

        It’s possible that being a union member is required for someone in his position, and he’s just paying dues to the one that’s the closest match for him.

        Coalition representatives said the proposed exemption would ensure the city complies with federal laws which they say give collective bargaining agreements precedence over local ordinances. They also contend that it would keep L.A.’s ordinance consistent with previous city wage laws.

        I can see that being the case, especially if similar exemptions exist in other cities (see jlwoj downthread). But if you’re the director of the central labor council, that’s a reason for you to accept (reluctantly and eventually, after much cajoling) the necessity of such a provision and ask for something in exchange, not to become one of the leading advocates for it.

  • That is the most idiotic thing I’ve ever seen come out of the labor movement, and I worked in the labor movement for eight years. Congrats, LA County Labor Fed, you just out-loonied the loonies.

    • jlwoj

      Shouting at Hicks and the LA Fed is silly. Hicks didn’t write the exemptions in SeaTac, SF, Long Beach, Milwaukee, …

      • Bruce Vail

        Yes, shouting at Hicks is silly.

        There are undoubtedly unions within the L.A. Fed pushing this, and Hicks is just the front man. Likely suspects would be any of the unions with a lot of very low-wage members. I’m thinking UFCW, or UNITE HERE, or SEIU…

        • CatoUticensis

          The ability to negotiate subminimum wages into union contracts is not a power that someone like Dave Regan should have.

  • Brett

    I don’t see how that would be sustainable – it would almost certainly draw a revolt from the members. They’ll know they’re getting a sub-minimum wage, which means you’d have to be promising something big to get them to accept it (like crazy good health insurance or the like).

    Or you’d have to be winking at them, promising that once they get in with the promise of a sub-minimum wage, you’ll raise it above the minimum wage. I’m sure that would work exactly . . . once. Then any incentive to unionize on the part of businesses for the cheaper wage would be gone.

    • jmauro

      They’ll know they’re getting a sub-minimum wage, which means you’d have to be promising something big to get them to accept it (like crazy good health insurance or the like).

      Not likely with the new taxes on Cadillac plans being phased in.

      It seems like a harebrained scheme to force unionization at companies that want to pay next to nothing. Let us unionize and you can pay all of your employees a cheaper wage. Yea it gets the numbers of union members up, but it makes all of them hate the union for screwing them out of extra pay.

  • Brett

    I don’t see how that would be sustainable – it would almost certainly draw a revolt from the members. They’ll know they’re getting a sub-minimum wage, which means you’d have to be promising something big to get them to accept it (like crazy good health insurance or the like).

    Or you’d have to be winking at them, promising that once they get in with the promise of a sub-minimum wage, you’ll raise it above the minimum wage. I’m sure that would work exactly . . . once. Then any incentive to unionize on the part of businesses for the cheaper wage would be gone.

    • Brett

      Fuck, double post.

    • CatoUticensis

      Yeah, this idea is really bad. Like, really really bad. In union shops, two-tier is about as corrosive as it gets to solidarity. At a time when the movement is struggling to build power, why would you implement a two-tier program that FUCKS YOUR DUES PAYING MEMBERS?

      I really can’t heap enough scorn on this shit-awful idea.

  • tsam

    But Rusty Hicks, who heads the county Federation of Labor and helps lead the Raise the Wage coalition, said Tuesday night that companies with workers represented by unions should have leeway to negotiate a wage below that mandated by the law.

    “With a collective bargaining agreement, a business owner and the employees negotiate an agreement that works for them both. The agreement allows each party to prioritize what is important to them,” Hicks said in a statement. “This provision gives the parties the option, the freedom, to negotiate that agreement. And that is a good thing.”

    That’s NOT how collective bargaining works. This guy needs to be examined for an acute head injury. Like, stat or whatever.

    • Brett

      If we were living in a country with Ghent Unions and no statutory minimum wage (like Denmark), this type of rationale would make sense – collective bargaining would set a minimum somewhere, and maybe adjust it on a business-to-business basis. But in this case? No way.

      • tsam

        True–this would make sense if there was some floor for compensation packages, but I think we all know where this is going–use medical and dental coverage as a cudgel to coerce huge wage concessions out of members.

  • Bruce Vail

    I suspect you’ll find UFCW at the bottom of this. Starting wages at most UFCW-represented supermarkets is marginally above minimum wage, with the rest of the wage scale built up from that. A big rise in the min wage will upset the whole system, and hit the grocery chains with a big rise in total labor costs.

    • Brett

      So they just set the bottom as “slightly above minimum wage” rather than above a particular specified amount? That seems kind of strange, although yeah, I could see that being a big problem – if it caused overall grocery wages to suddenly spike they’d immediately have to renegotiate it or face firings/business shutdowns.

      • Bruce Vail

        Well, I don’t have the details for the LA grocery contracts in hand so I am estimating. But it is quite typical for a UFCW contract to establish the entry-level wage at 5-10 percent above the state-wide (or city-wide) minimum wage. That way, the cashiers can pay their union dues and not be at a net-pay disadvantage to the entry-level cashiers at non-union supermarkets.

        A big problem for the union is that if the grocery chains wage costs suddenly spike, the chains will force them to cut pensions/benefits to compensate.

        • CatoUticensis

          Or they could…you know…organize their members, hold the line, build a coalition to fight off those attacks? Why would they do a silly thing like that though?

          Jesus fuckin’ wept.

          • Bruce Vail

            Yes, in theory. The UFCW tried this in the great 2003-2004 SoCal grocery strike and got its head bashed in.

    • jmauro

      I suspect you’ll find UFCW at the bottom of this. Starting wages at most UFCW-represented supermarkets is marginally above minimum wage, with the rest of the wage scale built up from that. A big rise in the min wage will upset the whole system, and hit the grocery chains with a big rise in total labor costs.

      Why wouldn’t the entire scale just shift up? It would seem they would have this problem any time the minimum rose at all.

      • Bruce Vail

        The entire wage scale would shift up, at least potentially. All of the grocery contracts would need to be re-negotiated to account for this, perhaps threatening the health and pension plans.

  • joe from Lowell

    Sit me down after the City Council votes and explain to me why collective bargaining units make it ok to pay less than statutory minimum, and I’ll keep an open mind. I’d certainly be skeptical, but hey, maybe the benefits and standards they can negotiate can work out better for the workers…I don’t know, maybe. I’d give the idea a listen.

    But fer Chrissakes, they’re doing this right at the end of a solidarity-based minimum wage campaign? Before the vote?

    What the hell, people?

    • Brett

      That makes me think they knew it would be unpopular, and wanted to try and get it added at the last minute once the increase was politically inevitable. Either that, or they simply missed the impact of what it would mean for part of their membership until the last minute, and are only now belatedly trying to fix it in an incompetent fashion.

  • LeeEsq

    American unions always had this stupid thing about wanting to be the group that gets the benefits for it’s members rather than government legislation.

    • Linnaeus

      To be fair, unions have supported a lot of legislation whose benefits accrue to nonunion and union workers alike. On top of that, government legislation isn’t a substitute for collective bargaining (it’s not an either/or thing, let me hasten to add) – you can get benefits through collective bargaining that are much harder to get though legislation.

    • Bruce Vail

      I think this view is outdated.

      Since Sweeney was elected at AFL-CIO some 15 years ago we’ve seen the unions move further away from that attitude. He started the ball rolling with the 180 degree turn on immigration and carried it through to supporting Obamacare (which has had few benefits for union members, and some real disadvantages). Trumka has been a great cheerleader on the minimum wage, and on other progressive issues that do little to put money in the pockets of union members.

      • LeeEsq

        It is historically true enough to support the observation even if there are some recent exceptions.

  • yet_another_lawyer

    Haven’t employers been making more and more people nominal supervisors so they couldn’t join the union? If this goes through, how quickly do you want to bet that all of those people lose their recent “promotions?”

  • Juicy_Joel

    Entirely off topic but wanted to note that my copy of Loomis’ book just shipped, yahoo!

    “Your Amazon.com order of “Out of Sight: The Long and…” has shipped!”

    • Yay!

      • Jordan

        I’m getting mine soon too. Are we going to do a book club read or something like that here?

  • haroldj

    Why wouldn’t this be preempted under the NLRA? It punishes employees that join a union (albeit with the endorsement of some Union leaders.) If it isn’t preempted by federal law, then Right to Work states could start setting lower standards (on min wage, workers comp, etc) in private sector. Very stupid move…

    • CatoUticensis

      Nah. From a federal labor law standpoint, so long as wages don’t drop below 7.25/hour it’s all fair game. State and local minimum wage agreements don’t really have an impact on federal labor law.

  • CatoUticensis

    I really can’t say enough bad things about this idea. It’s so fucking bad. It’s Nickelback levels of bad. It’s…Game of Thrones Season 5 levels of bad.

  • KenB

    Isn’t negotiating working conditons and wages exactly what unions are supposed to do? Isn’t that exactly what they are trying to do in this case?

    One of the main anti-union talking points is that union leadership is only looking out for their own interests rather then the intrest of the member. The commenters here (and the OP) seem to have bought that hook line and sinker. Maybe membership would like to trade higher wages for better scheduling or oher non-wage working conditon.

  • manual

    The knee jerk LGM analysis is not too surprising. But what is surprising is the collective ignorance on city wage ordinances. This exemption has been included in cities around the US when minimum wage laws are enacted.

    I probably am responding too late to register my response but whatever.To be clear, I dont think it is a particularly great idea but the sweeping and shallow condemnation is pretty weak.

    For starters, union’s often try and create a competitive business climate for their employer which allows the union members to reap in business profits. Anyone who has worked in labor knows that contrary to the childish idea that unions are agents of the USSR, they are actually outgrowths of the companies for which they work. You cant command a good wage, COLA adjustments and health benefits if your company cannot find operate effectively against its competitors. The supposed golden age of industrial labor capitalism was predicated on closed outside competition and a union dense employment environment that allowed companies to be competitive while unions extracted the surplus capital.

    More to the point, the union exemption also serves as an important inducement for companies, especially in labor friendly metropolitan cities, to enter into neutrality agreements (e.g. card check) with their workers to allow a union. If a company can gain an advantage by having a union sometimes it will. This also allows the union to build density and eventually the equilibrium will shift in favor of union wage control, which would be higher than the statutory rate. In the short run the company benefits, in the long run the workers benefit greater.

    If you’ll notice, in many high wage European countries they do not have a legal minimum wage. Why? Because the wage floor is set by the collective bargaining process. It’s always higher than in the US and its because of the union(s) and its density.

    Finally, the reason for these exemptions is that the union shop is probably more expensive or at parity with the statutory rate when non-wage benefits are factored in (PTO, benefits, overtime etc).

    I personally think this is not the greatest idea because american capitalism is anti-labor and the brute cudgel of the government is probably more effective in delivering higher wage outcomes. That said, its not terribly surprising that the union(s) support this for the aforementioned reason. European labor unions generally support this model. I do find it somewhat surprising how shocking this is to the readership, however.

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