Why unions support the minimum wage...

The Union Push Behind the Calls for Increasing the Minimum Wage

Robert Wenzel

It has become obvious in the People's Republic of San Francisco. The San Francisco Chronicle reports:

Labor activists will file papers Monday to give San Francisco voters a chance to raise the minimum wage to $15 an hour - the highest in the nation.

While Congress balks over raising the federal minimum wage to $10.10 an hour, the city's November ballot will probably include the "Minimum Wage Act of 2014," which is designed to lift base pay roughly 40 percent from its current $10.74.

The ballot measure, designed by SEIU Local 1021 and groups including the Alliance of Californians for Community Empowerment, gives businesses with fewer than 100 employees until 2017 to lift wages to $15 an hour. But they must raise wages to $13 an hour by 2015 and $14 by 2016, according to the proposal.

Mark Berman, the executive director of the Center for Union Facts, explained, in WSJ, the obvious desire of unions for a higher minimum wage:

Organized labor's instantaneous support for President Obama's recent proposal to hike the minimum wage doesn't make much sense at first glance. The average private-sector union member—at least one who still has a job—earns $22 an hour according to the Bureau of Labor Statistics. That's a far cry from the current $7.25 per hour federal minimum wage, or the $9 per hour the president has proposed. Altruistic solidarity with lower-paid workers isn't the reason for organized labor's cheerleading, either.

The real reason is that some unions and their members directly benefit from minimum wage increases—even when nary a union member actually makes the minimum wage... The increases restrict the ability of businesses to hire low-skill workers who might gladly work for lower wages in order to gain experience. Union members thus face less competition from workers who might threaten union jobs.

This view is not speculation. A 2004 study in the Journal of Human Resources by economists William Wascher, Mark Schweitzer and David Neumark determined that lower-wage union workers typically see a boost in employment and earned income following a mandated wage hike. Never mind the corresponding drop in jobs and earned income for nonunion minimum-wage workers. They may have been priced out of the jobs they need, but that is not the union's concern—its members have landed higher wages and reduced competition for jobs.

Link:
http://www.economicpolicyjournal.com/2014/04/the-union-push-behind-calls-for.html