How a $15 Minimum Wage Went From Fringe to Mainstream
By 2020 there will be a $15 minimum wage in effect for fast-food workers in New York City, for employees of large companies in Seattle, and for all workers in Los Angeles. On March 28, California Governor Jerry Brown announced a deal to make the $15 wage standard throughout the state by 2022. Last year, Democrats in Congress proposed making it the national starting wage, replacing the $7.25 federal minimum that prevails today.
None of that would have been possible without the union-conceived Fight for $15, a four-year-old effort that’s been organized labor’s most effective political campaign in recent memory. “On the political level, it’s definitely working,” says Vincent Vernuccio, who directs labor policy for the Mackinac Center for Public Policy, a Michigan-based free-market think tank. The Fight for $15 was the brainchild of the Service Employees International Union, the second-largest in the U.S., many of whose 1.9 million members work for local or state government or in taxpayer-funded health-care jobs. Since 2012, SEIU has sunk millions of dollars into the Fight for $15 to pressure fast-food corporations to allow unionization, lobby elected officials to pass higher wage laws, and support worker walkouts and mass demonstrations.
SEIU’s president, Mary Kay Henry, is gambling that the Fight for $15 will help save her union. She says increasing standards for the worst-paid workers is bolstering her members’ efforts to win bigger raises. SEIU leaders also believe pressure on fast-food corporations will eventually yield a deal that covers millions of workers, improves their lives, and includes a funding mechanism for the campaign to continue—even if the result doesn’t look like a traditional union. “We bargain in the way we know how,” Henry says. “We’re also taking risks in building a movement that’s going to birth the next form of worker power.”
Unions are in a weaker position today than they’ve been in decades. In February, West Virginia became the fourth state in as many years to pass a law letting workers in the private sector opt out of paying union fees, even if they’re covered by union-negotiated contracts. A 2014 decision by the U.S. Supreme Court banned mandatory union fees for Medicaid-funded home-health aides, SEIU’s fastest-growing membership group.
On March 29, the court issued a split 4-4 ruling in a case challenging mandatory union fees for public-sector workers covered by union contracts. The deadlock leaves current rules allowing such fees intact, but at least one other challenge has already been filed in a lower court. That means the Supreme Court may choose to revisit the question after the seat left vacant by the death of Justice Antonin Scalia is filled. Losing mandatory fees, unions say, would drive their share of the U.S. workforce below today’s 11 percent, down from about one-third 50 years ago. “We can’t survive in a world where the oxygen is being cut off,” says Larry Hanley, president of the 190,000-member Amalgamated Transit Union.
Before becoming SEIU’s president in 2010, Henry was head of its health-care division. Under her leadership, it successfully unionized home-health aides by getting states to treat them as public employees rather than independent contractors, and cut deals with hospital chains that made it easier to add more workers to the union. As president, Henry quickly moved to persuade union leaders inside and outside SEIU that the movement was on a trajectory to oblivion unless it could find new ways to bring more workers under the umbrella of organized labor. “No matter how successful SEIU will be, it cannot win in the long term unless we create a broader movement,” says Eliseo Medina, SEIU’s former secretary-treasurer. “That was the context.”
Central to Henry’s solution was tethering SEIU, long a reliable source of Democratic campaign volunteers, to a public-advocacy effort against income inequality. In 2011, SEIU created what it called the Fight for a Fair Economy, which aimed at introducing wages into the national conversation before the 2012 election. “We made a decision not to make it an SEIU thing,” avoiding branding the campaign with SEIU’s signature violet logo, says Neal Bisno, who heads SEIU’s health-care-workers union in Pennsylvania. “We literally took off our purple T-shirts.” In February 2012 an internal SEIU memo outlined a plan to position unions as an answer to income inequality, in part by mobilizing fast-food workers.
While SEIU has been funding and directing the Fight for $15 from the start, local organizing groups such as New York Communities for Change and Chicago-based Action Now served as the campaign’s initial public face. Until the California deal, many of its biggest victories were at the city level. New York Governor Andrew Cuomo is also pushing for a statewide $15 minimum for all workers.
Yet to critics, the Fight for $15 amounts to a feel-good distraction from the very real problems SEIU faces. The organization, which long touted itself as America’s “fastest-growing union,” reported 23,000 fewer members at the end of 2014 than in 2010. The problem, some SEIU veterans say, is how to justify the continued outlay for minimum-wage protests on behalf of nonunion workers in light of the decline in dues-paying memberships. Just as AARP relies on the money it makes in royalties from licensing insurance and other products, SEIU needs to find a funding stream to pay for its social-justice work, says Andy Stern, who preceded Henry as SEIU president. The union can’t just keep transferring revenue it makes from bargaining contracts to pay for its social justice work, Stern says, “because collective bargaining is shrinking.”
To Henry’s allies, that’s an outmoded way of thinking about labor. SEIU Healthcare Illinois President Keith Kelleher says a potential model could be the New York–based Freelancers Union, which doesn’t have collective bargaining deals with individual companies. Instead, it funds itself by taking commissions on health insurance and other services sold to its members. “If it has the power to raise wages and it contains a model for organizational resiliency and standards enforcement, does it matter?” asks David Rolf, president of the largest SEIU local in Washington state. Given the challenges unions face, Henry says, “you can’t go smaller in this moment. You have to go bigger.”