Labor’s minimum wage loophole leaves its members behind

Original Article:

  • Author: Michael Saltsman

  • Publication Date: July 2017

  • Newspaper: Orange County Register

  • Topics: Minimum Wage

Santa Monica’s yearly minimum wage increase went into effect on July 1 and reached as high as $15.66 per hour for hotel workers. But at least one group of employees didn’t feel the benefit: Hotel employees represented by UNITE HERE Local 11. This isn’t a quirk in the city’s minimum wage law, but rather an intentional omission designed to grease the proverbial skids of Local 11’s organizing efforts.

The story starts in 2015, when the Santa Monica City Council was debating whether to follow Los Angeles’ lead on a $15 minimum wage. Los Angeles has two minimum wage ordinances; one passed in 2014 that applies specifically to hotels, and another passed in 2015 that applies to all other businesses in the city.

One key difference between the two ordinances is how they apply to employees covered by a collective bargaining agreement. The hotel ordinance excludes these employees, and unions attempted to insert similar language into the citywide ordinance. This labor loophole generated national outrage — the Los Angeles Times editorial board described it as “hypocrisy at its worst” — and both the council and mayor tossed cold water at the idea.

But the City Council in Santa Monica isn’t so easily shamed. The final ordinance passed by the city matched Los Angeles’ city-wide and hotel-specific wage mandates, but carved out union members from the entire ordinance. Ironically, an organization designed to bargain for better pay ensured that, as of July 1st, non-union hotel employees in the city were guaranteed an hourly rate that’s 46 percent higher than their union counterparts.

Prior to the law’s passage, Councilwoman Sue Himmelrich used anecdotes to justify her support for the union member exclusion, pointing to conversations she’d had with hotel employees who “would prefer to have a union negotiating on their behalf for better benefits in different aspects of their lives.” The Los Angeles Times interviewed other Local 11 employees across the region who weren’t hand-picked by the union, and received a very different response. “The union isn’t really doing anything for us,” one employee said. “It’s completely upside-down. They want to pay us less than the minimum wage.”

It’s not just union members who find this strategy unseemly and divisive — other union leaders do, too. Dave Regan, the president of a powerful SEIU local in California, told the Times that “unions should not be in the business of carving out lower wage standards for ourselves.” He added: “We don’t help ourselves with anybody — with our members or the public — by the defending the indefensible.”

Local 11 does seem to be helping its own bottom line, though. Since the Santa Monica ordinance took effect on July 1st, 2016, Local 11 has successfully organized employees at the JW Marriott Le Merigot and DoubleTree hotels. These employees, who are now paying dues for the “privilege” of being excluded from the city’s wage law, might be interested to know how their dollars are being spent. For instance, Local 11 spent more than $10,000 in fiscal year 2016 for a directors’ retreat at the “luxury” Riviera Palm Springs, and another $12,700 on Christmas gifts for its staff.

The real tragedy of the $15 wage experiment isn’t that some employees lose out on a raise — it’s that they lose out on a job entirely. Recent studies of wage increases in San Francisco and Seattle confirm the folly of experimenting with minimum wage levels far above the historical standard. But even if Santa Monica residents support their city’s fight for $15, their consciences should be shocked at the Local 11 loophole that keeps this raise from union members.