Labor Groups Pushed For Wage Bump
Big labor has apparently fallen out of love with Los Angeles’ $15 per hour minimum wage. The “Fight for $15” has been backed by unions who have advocated for the massive increase in boisterous rallies across the country. However, with the Los Angeles City Council recently voting for the local minimum wage to reach $15 by 2020, labor groups want union companies exempted. In an interview with the Los Angeles Times, union boss Rusty Hicks explained that union shops need greater flexibility than the new wage would allow: “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.”
What Happens Next
Unions want an exception written into the law the City Council passed last week. Passage of some form of minimum wage hike seems likely, but the union exception is an unexpected development whose future is less certain.
What This Means For Small Business
In an interview with the Los Angeles Times, restaurant owner George Abou-Daoud called the union’s plan “insane hypocrisy,” adding, “The unions have put forth an agenda that they themselves don’t have to comply with.” That the selfsame unions pushing for drastic increases to the minimum wage now want personal exemptions underscores just how bad for business a massively increased wage floor would be. Labor’s arguments highlight exactly why a $15 minimum wage poses such a serious risk to small business owners: it limits the flexibility on which independent businesses rely and dangerously narrows margins. Each one dollar increase to the minimum wage costs businesses more than $2,000 per full time equivalent worker, a fee that is impossible for many employers to cover without implementing staff cutbacks.
Additional Reading
NFIB previously covered the City Council’s passage of the minimum wage bill. Other news media outlets covering the union pushback include the Washington Times, Vox, Slate, Forbes, and Investors Business Daily.
In his column for the Washington Post, Robert J. Samuelson writes that projections for job losses from LA’s move may be underestimated while conservative site Breitbart warns, “The added cost to making a Hollywood production might very well make Hollywood a less attractive venue to do business.”
