Or not.

ROBYN BECK/AFP/Getty Images

Now Union Opposes the Minimum Wage

Megan McArdle is a Bloomberg View columnist. She wrote for the Daily Beast, Newsweek, the Atlantic and the Economist and founded the blog Asymmetrical Information. She is the author of "“The Up Side of Down: Why Failing Well Is the Key to Success.”
Read More.
a | A

As readers of this column know, Los Angeles recently decided to raise its minimum wage to $15 an hour across the board, including even tipped workers like waitstaff. A lot of businesses opposed the new rule on the grounds that it would make their operations unaffordable. Now a new group is joining them in saying the law's not right for their operation: union leaders.

You read that right. Union leaders are saying that the $15 minimum wage is a bad idea. Not for everyone, of course; for most businesses and workers, they think it's splendid. But for union operations, they need an exemption. Rusty Hicks, the head of the Los Angeles County Federation of Labor, said businesses that have collective bargaining agreements with employees should be able to negotiate a wage below the "minimum."

This has been greeted with jeers from both left and right, though Matt Yglesias does mount a defense: in many countries, collective bargaining is a pretty good substitute for a minimum wage. Point taken, but it's hard to see how that saves the unions from the charge of rank hypocrisy. That same Rusty Hicks has a pretty clear record:

"Raising the minimum wage in LA County would help lift county workers, contractors and workers in unincorporated areas out of poverty and stimulate the economy." -- LA County Raise the Wage

"Among his highest priorities, Hicks said, will be to push forward a citywide minimum wage in Los Angeles, preferably of $15 an hour. ... The statewide minimum wage stands at $9, but L.A. workers need $15 because of the high costs of housing and other necessities, Hicks said." -- Los Angeles Times

"You can’t continue to have a strong, vibrant economy if in fact folks don’t have money in their pockets." -- Southern California Public Radio

"Hicks argued that increasing the minimum wage for those barely getting by would decrease government subsidies in such things as child care and food stamps, saving the taxpayer dollars ... Hicks argued that business has claimed job loss as a result of minimum wage increase since the minimum wage came into being in the 1930s, and that has not happened." -- Calwatchdog

Do union workers not deserve to be lifted out of poverty like other workers? Do they enjoy special discounts on housing and other necessities that leave them unaffected by the high cost of living plaguing the city's other workers? Are their paychecks not part of the stronger, more vibrant economy that Hicks hoped to achieve through a $15 minimum wage? Do they have a special claim on taxpayer subsidies? Or are their jobs somehow uniquely vulnerable to loss?

Here's a more plausible explanation: Having achieved their goal, the unions are now worried that excessively high minimum wages will cost their workers jobs. Here's another one: Perhaps unions fancy the idea of a labor market in which union workers are, through government fiat, the cheapest game in town. I'm sure that would be very good for the LA County Federation of Labor. But no explanation has been offered as to why it would be good for LA County.

Even if you believed the $15 minimum wage to be a bad idea, it's hard to see the exemption as a good idea. The first problem is economic. An exemption would introduce a fair amount of distortion into the labor market, and it's far from clear to me that this distortion is preferable to a blanket wage. The second problem is political. An exemption would create substantial perverse incentives for unions to drive up the minimum wage really high, effectively recruiting workers to become part of unions for the chance to work at negotiated (sub-"minimum") wages.

If workers have to have $15 an hour to live in LA, and that's a level the economy can support with minimum job loss, then the $15-an-hour wage should apply to everyone. If in fact this wage level is too costly, then LA should lower it for everyone. Lowering it only for favored political groups is a terrible idea, and the unions have earned every bit of the catcalling they got for suggesting it.

This column does not necessarily reflect the opinion of Bloomberg View's editorial board or Bloomberg LP, its owners and investors.

To contact the author on this story:
Megan McArdle at mmcardle3@bloomberg.net

To contact the editor on this story:
Philip Gray at philipgray@bloomberg.net