Unions: Let's Exempt Union Employees from Minimum Wage Laws

[dandh]

From the article linked below:

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."

That's some darn good representation, ain't it? Or, maybe it's the union trying to get more in dues dollars at the expense of the employee.

http://touch.latimes.com/#section/-1/article/p2p-83635492/

 

[Nat Algren]

Lower Minimum Wage To $0

By Katie Kieffer

If you love In-N-Out burgers and care about the workers who flip your burgers, then you should support a minimum wage of $0.
Deep down, I know you’re tired of seeing actors jump up and down for TV cameras while waving professional signs that read: “McGreedy! McStingy! McPoverty!” or “McShame. McDonald’s. Raise That Wage.”
You weren’t born yesterday. You doubt that these protestors come up with these slogans on their own or fashion them into makeshift signs with their own cardboard, sticks and markers. You suspect they were given signs and paid to wave them. Indeed, in recent protests, 84% of McDonald's "protesters" were not real McDonald's employees but paid and trained professional rioters.
Professional rioters pout and shout in public for a one-time cash payment—not a cause. Since rioters are not entrepreneurs, they do not empathize with the challenges of competing in the restaurant business where profit margins hover at 4%. Nor do they understand the feat of turning a profit while relying on a staff of over-paid and inexperienced high school students.
Read the rest here.
RW note: Kieffer speaks truth here, Especially in Washington D.C. you see these protestors all the time. They take these protesting gigs becasue they can't get jobs at current high minimum wages. So they take cash from union organizers at below minimum wage rates to protest in favor of higher minimum wages that will keep them out of above ground jobs!

http://www.economicpolicyjournal.com/2015/05/lower-minimum-wage-to-0.html

 

[theIowaHawk]

On first reading it seems strange, but it certainly does have some sense to it. The idea being that most workers need protection, i.e. minimum wage laws, further that collectively-bargained employees have that protection. Not sure I agree with it, but it isn't as wild as it seems at first glance.

 

[MN.HAWK]

Entrepreneurs have and will respond to mandatory wage minimums by moving their companies; raising prices; reducing staff; deferring expansion plans; or by reducing the quantity and quality of their services.

This statement doesn't seem to ever register with some here on HROT

 

[theIowaHawk]

Entrepreneurs have and will respond to mandatory wage minimums by moving their companies; raising prices; reducing staff; deferring expansion plans; or by reducing the quantity and quality of their services.

This statement doesn't seem to ever register with some here on HROT

Would you have to close your joint MN, at $15/hour?

 

[MN.HAWK]

If it happened overnight, hell yes. Over 5 years by 2020, MAYBE not, but there would be significant price increases, and likely hours/jobs cut as volume declines as prices increase.

In another thread I mentioned a raise to 15 would cost me over 1500 a week, without taking social security or medicaid into account. It would also assume that those that currently make more than minimum (supervisors and assistants) would now only make the minimum. Which seems logical, a supervisor in charge should make the same as the 16 year old hired the day before.

So, to cover 1500 a week (more actually) increase in labor while trying to maintain about 20% of sales as a labor percentage, would take a drastic price increase combined with hour reductions.

 

[dandh]

On first reading it seems strange, but it certainly does have some sense to it. The idea being that most workers need protection, i.e. minimum wage laws, further that collectively-bargained employees have that protection. Not sure I agree with it, but it isn't as wild as it seems at first glance.

You're missing what's happening here. Union employees will make less than the minimum wage because union bosses are selling them out to line their own pockets. Either that or the unions are lying about the impact of minimum wage on employers, and they know it will cost many jobs, but are pushing it regardless.

 

[Nat Algren]

Unions support the MW because it prevents non-union labor from under-cutting them.

 

[dandh]

Unions support the MW because it prevents non-union labor from under-cutting them.

No.

 

[Chuck C]

This allows the unions to negotiate and allocate their money in the ways they want to. Most unions have a benefit package that entails more than just the on the check wage. As an example in my union, the IBEW, we have a total package that is about 45 dollars an hour. That money is divided up between the hourly wage, health and welfare, and pension. The on the check hourly wage is about 32 dollars an hour.

So if a union there in LA has a benefit package of 20/hour this exemption can allow them to allocate their money in a way that might put their hourly wage below 15$ an hour.

Everything else you said is pretty laughable. You obviously have no idea how a union operates. Who are these mythical union bosses you talk of? You do realize everything has to be voted on by the members of the union? These mythical union bosses can't just come in and change anything they want.

 

[theIowaHawk]

You're missing what's happening here. Union employees will make less than the minimum wage because union bosses are selling them out to line their own pockets. Either that or the unions are lying about the impact of minimum wage on employers, and they know it will cost many jobs, but are pushing it regardless.

I'm not missing your characterization of what will happen. My post was quite clear.

 

[theIowaHawk]

Who are these mythical union bosses you talk of? You do realize everything has to be voted on by the members of the union? These mythical union bosses can't just come in and change anything they want.

 

[What Would Jesus Do?]

Entrepreneurs have and will respond to mandatory wage minimums by moving their companies; raising prices; reducing staff; deferring expansion plans; or by reducing the quantity and quality of their services.

This statement doesn't seem to ever register with some here on HROT

You are shameless. Some of that is true or at least a possible consequence. And the parts that are true we acknowledge. We just don't think they are good arguments against raising the MW.

Please up your game so you aren't just posting straw men and then pretending people agree with it.

 

[MN.HAWK]

You are shameless. Some of that is true or at least a possible consequence. And the parts that are true we acknowledge. We just don't think they are good arguments against raising the MW.

Please up your game so you aren't just posting straw men and then pretending people agree with it.

I didnt' make the quote, I simply said you and your ilk ignore that factor. You can not think it's a good argument but I can show you the math, again, if that helps. How is that shameless? I'm a small business owner who deals with wages every day of the week, how about yourself?

 

[What Would Jesus Do?]

I didnt' make the quote, I simply said you and your ilk ignore that factor. You can not think it's a good argument but I can show you the math, again, if that helps. How is that shameless? I'm a small business owner who deals with wages every day of the week, how about yourself?

Yes, please show us the math. That might be useful.

 

[22*43*51]

I not against a minimum wage increase; it is time.

I am against plucking an arbitrary number like $15 an hour from thin air and expecting every business large and small to suck it up and deal with it.

There is this concept out there that all companies are sitting on endless amounts of cash and stroking their Persian cat's while snickering about it. There will be real consequences. Some will be absorbed. Most will be passed on to the consumer and low skilled worker, thereby negating the impact of increased wages.

But, bringing everyone to the middle is the goal it seems. It reminds me of a Vonnegut story I read once.

 

[22*43*51]

Yes, please show us the math. That might be useful.

Have you managed a P&L before? Serious question.

 

[What Would Jesus Do?]

Have you managed a P&L before? Serious question.

Yes.

 

[MN.HAWK]

Yes, please show us the math. That might be useful.

It's not different than the last time I showed you. A $15 dollar minimum wage would have cost me over 1500 last week, without including SS or medicare. So, in order to keep labor at or around 20% of sales, what would a price increase needed be? Also, do people who used to make more than minimum $10-12 an hour, now make $15, same as the person hired yesterday? If no, factor in that increase as well.

 

[22*43*51]

Yes.

Then what happens when you double a variable cost like labor?

 

[dandh]

This allows the unions to negotiate and allocate their money in the ways they want to. Most unions have a benefit package that entails more than just the on the check wage. As an example in my union, the IBEW, we have a total package that is about 45 dollars an hour. That money is divided up between the hourly wage, health and welfare, and pension. The on the check hourly wage is about 32 dollars an hour.

So if a union there in LA has a benefit package of 20/hour this exemption can allow them to allocate their money in a way that might put their hourly wage below 15$ an hour.

Everything else you said is pretty laughable. You obviously have no idea how a union operates. Who are these mythical union bosses you talk of? You do realize everything has to be voted on by the members of the union? These mythical union bosses can't just come in and change anything they want.

Interesting - I've been involved in collective bargaining (on both sides and professionally) for over 35 years, but I don't know how unions work. I've been chief spokesman for both the union side and management's side in contract negotiations, in negotiations with as many as 7 unions bargaining simultaneously, I've first chaired arbitrations, represented the employer regarding unfair labor practice charges and other Board issues, and have even been involved in election campaigns. Great insight about my knowledge and understanding of unions, chuck.

Your total package story is nonsense in this case. No negotiator in their right mind would turn down an automatic doubling of salary over the next five years for the employees they represent unless they have some other motive. These are people making minimum wage or thereabouts, not people with decent contracts like you and your Brotherhood of Electrical Workers brothers and sisters. I've never seen a contract with really low wages and rich benefits - please post a link for me to one if you know of one. There might be a few lower paid employees (janitors, etc) with good benefits that are below $15 now, but we're talking five years from now. This would just bump them up a little, which a good union would have been trying to do anyway. Not a likely scenario at all.

For the edification of those who don't know how unions operate, let me explain a few things.

First, the workers who pay dues belong to a local level union. That local is normally affiliated in several ways - primarily with an international union - such as yours - the International Brotherhood of Electrical Workers (IBEW). It may also be affiliated with state or national federations, such as the Iowa Federation of Labor (IFL) or the American Federation of Labor - Congress of Industrial Organizations (AFL-CIO).

However, the local union doesn't get to keep most of the dues dollars. Most of the money collected by the local is submitted to the international union or a regional subset in the form of a per capita tax (set amount of dollars or percentage per member per month paid by the local union to the international union). The state federation of labor and the AFL-CIO may siphon off more per capita tax, and some of the money may go to the PAC operated by the international union. The per capita funds that pay the big bosses' (International Presidents, VPs, and other executives) salaries and benefits - many of which are extremely generous - and other salaries and expenses (business agent salaries, administrative support salaries, etc.

Therefore, the dues dollar is the lifeblood of the international union and the state Federation of Labor and the AFL-CIO. Private sector unions are struggling to survive, as people turn away from them. By exempting the union employees from the higher minimum wage - two things happen. First, if there is a negative impact on jobs caused by the new law, more union workers will be able to keep their jobs and membership won't be negatively affected. This keeps dues dollars flowing to the union bosses.

Second, and more important, is that instead of fighting against union representation as is now the norm, companies will welcome union representation in their workplace. It will give them a competitive advantage by keeping their workers' salaries lower than that of their non-union counterparts. It will also increase the per capita tax paid to the international union, allowing for the continuation and growth of workers' money flowing into the pockets of union bosses. Unfortunately, the guy who's been paying dues for the last ten years won't be making as much as he could have, thanks to the union bosses' attempt to exempt him from the new minimum wage law, which "coincidentally" lines their own pockets.

That's a simplified thumbnail of how it works. There are cases with large multi-employer locals where the bosses are at the local level, but the principle is the same.

If you disagree, chuck, please tell me about your bona fides and how you think it works. I'm curious as to who pays your salary (the union itself?) and what you see in my explanation that you think is inaccurate.

 

[MN.HAWK]

I think some people might find this interesting. Pretty accurate although every business is going to be different in some aspects of costs, rents, utilities, etc. but this gives a really good idea for those not in the restaurant world, what some rule of thumb percentages are. As 22 pointed out, the idea that restaurants are a license to print cash, based on looking at a menu price vs. cost of a product, is out there. Looking at what all goes into it may be interesting to some.

All about volume, once you get to a break even number.

 

[theIowaHawk]

You ignore the theoretical point by simply generalizing, and doing so in an unproductive way.

The point of these things isn't that complicated. Minimum wage is to protect low-earners, if they are members of an organization protecting them, they don't necessarily need that minimum wage.

This is applied in lots of areas, but one, for example is that "Managers" are exempt from these types of things, such as overtime. The idea being that those people can protect themselves.

 

[theIowaHawk]

All about volume, once you get to a break even number.

All you need to do is start charging $3 for the sour cream. Simple.

 

[dandh]

I'm not missing your characterization of what will happen. My post was quite clear.

Re-read and see what you're saying. As far as it goes, I think that makes sense. I do think it goes further than that, although. (See my mind-numbingly long post above - last 5-6 paragraphs or so.)

 

[22*43*51]

All you need to do is start charging $3 for the sour cream. Simple.

That is a solution.

So long as all of your competitors do the same.

 

[MN.HAWK]

And a whole lot more people start ordering sour cream than they currently do

 

[dandh]

And a whole lot more people start ordering sour cream than they currently do

If you raise the price, fewer people will order it. Truth be told, it would likely never get you where you need to go, as people won't pay that much for it. But, you know that.

 

[MN.HAWK]

If you raise the price, fewer people will order it. Truth be told, it would likely never get you where you need to go, as people won't pay that much for it. But, you know that.

Right. Which will be another consequence of a price increase to offset a doubling of labor. Less hours, and even layoffs.
Assuming a price increase will decrease pizzas ordered, it will, less labor is needed. I currently have two special needs employees who each get about 8 hours a week to clean the dining room each morning. It's not much but at $15 an hour both of their jobs would be eliminated and an employee at night would be expected to do the job.

 

[theIowaHawk]

Y'all have convinced me, I am against a $15 minimum wage.

Do we agree that there is a problem, regardless of fault, when an entire workforce makes just enough at work to have the government pick up the rest? The arguments re: Walmart for example?

 

[22*43*51]

Y'all have convinced me, I am against a $15 minimum wage.

Do we agree that there is a problem, regardless of fault, when an entire workforce makes just enough at work to have the government pick up the rest? The arguments re: Walmart for example?

Agree.

Way more people than there are jobs. More than private industry can bear. More than our government tax structure and assistance program's architecture can bear.

And we keep inviting in more people.

 

[MN.HAWK]

Y'all have convinced me, I am against a $15 minimum wage.

Do we agree that there is a problem, regardless of fault, when an entire workforce makes just enough at work to have the government pick up the rest? The arguments re: Walmart for example?

Yep. I'm personally against more government on any front and, in my case, would love no minimum wage. I could pay the top end employees what they should make and the entry level employees an entry level wage. If they are good and work hard they would earn more money. Water finds it's own level and if I attempted to pay everyone $5 an hour I would only get the most unreliable, untrustworthy employees around and would only hurt myself.

Of course this applies to me. Where other places may have zero problem paying everyone 5 bucks an hour and turning over employees every other day. I'm sure WWJD will call BS on me, since I'm a business owner I'm evil and only looking out for me and not my employees, but it is honestly how I feel.

 

[The_Joker13]

Y'all have convinced me, I am against a $15 minimum wage.

Do we agree that there is a problem, regardless of fault, when an entire workforce makes just enough at work to have the government pick up the rest? The arguments re: Walmart for example?

There's no room here for common ground. RABBLE RABBLE RABBLE

 

[theIowaHawk]

Yep. I'm personally against more government on any front and, in my case, would love no minimum wage. I could pay the top end employees what they should make and the entry level employees an entry level wage. .

So, what is your entry-level wage proposal?

 

[What Would Jesus Do?]

Then what happens when you double a variable cost like labor?

The market adjusts. What's your point?

You may not like one or more of the possible ways that the market adjusts. But that doesn't mean the original change is bad or wrong or shouldn't be done. I've had this argument with people here often enough to know that most who start the discussion as if they know "the truth" generally only have simplistic and/or dogmatic views.

I'd be happy to have a "good" discussion on these variables

It's not different than the last time I showed you. A $15 dollar minimum wage would have cost me over 1500 last week, without including SS or medicare. So, in order to keep labor at or around 20% of sales, what would a price increase needed be? Also, do people who used to make more than minimum $10-12 an hour, now make $15, same as the person hired yesterday? If no, factor in that increase as well.

Do you remember what I said the last time? If so, why are you arguing with me?

 

[The_Joker13]

Agree.

Way more people than there are jobs. More than private industry can bear. More than our government tax structure and assistance program's architecture can bear.

And we keep inviting in more people.

This is a major part of the problem imo, and a reason we do in fact need a minimum wage. I think the problem most people have is agreeing on what or how that should be established.

 

[22*43*51]

The market adjusts. What's your point?

You may not like one or more of the possible ways that the market adjusts.

You could have answered the original question honestly and said

"No. I have never managed a P&L".

 

[What Would Jesus Do?]

You could have answered the original question honestly and said

"No. I have never managed a P&L".

That would be wrong.

You apparently have nothing else to say. You can't make your arguments, so you resort to making things up.

Sad, but BAU.

 

[MN.HAWK]

So, what is your entry-level wage proposal?

I dont' know. I've kept myself up too late at night trying to come up wiht it. The problem is, what I see as fair, another business could use as a workaround. For example an "adult" not in school, working X amount of hours a week - living wage. HS kids, kids living at home, Y hours a week or less, a different entry level wage. Obviously a place could simply 3 high school kids at 12 hours a week rather than 1 adult at 36 hours, and save money. Would be a bad consequence of what I would like to see.
For every plan I come up with that would work for a small guy like myself, I can come up with a scenario where someone else could expose it and take advantage.

 

[MN.HAWK]

That would be wrong.

You apparently have nothing else to say. You can't make your arguments, so you resort to making things up.

Sad, but BAU.

Have you gotten the math done for me yet, so I know what I should raise my prices to so the market can adjust.