Study finds union carve outs in many minimum wage hikes
Unions may be pushing for President Obama’s massive minimum wage hike, but many seek special carveouts from existing wage laws, according to a new study.
The Chamber of Commerce analyzed dozens of minimum wage laws in cities across the country and found that many of the statutes exempt unionized employees from the requirement. Unions exploit these exemptions in order to make union labor more competitive with non-union shops.
“Some local ordinances in particular include an exemption for employers that enter into a collective bargaining agreement with a union,” the report says. “This ‘escape clause’ is often designed to encourage unionization by making a labor union the potential ‘low-cost’ alternative to new wage mandates, and it raises serious questions about whom these minimum wage laws are actually intended to benefit.”
When San Francisco adopted a $10.55 minimum wage in 2013, union employers were able to escape the large hike in labor costs. The unionized shops were granted the ability to remain below that market rate in perpetuity, while other companies had to adopt the new wage over the course of several years.
“Unionized employers with collective bargaining agreements that waive the provisions were also exempted from the minimum wage law, although, unlike the other carve-outs, that exemption did notexpire and remains in effect today,” the report says.