Are Minimum Wage “Carve-outs” Worth the Arguments?

ACORN_3New Orleans   As difficult as it is win higher wages in cities around the country, where it has happened businesses are trying to pump up a controversy over union attempts to pass “carve-outs” that would exempt union contracts from compliance with the living wage agreements. There is nothing new in unions trying this tactic in some cities, and Los Angeles where most of the hootenanny is now, has always been controversial in this area, but the real question is whether or not any gain is worth the pain of labor having its great victories tarred by the seeming contradiction.

The mischief began when Los Angeles unions and their labor federation asked the Los Angeles City Council for a waiver shortly before they were expected to pass the increase to $15 per hour by 2020. The waiver would have exempted collective bargaining agreements. The business community and the local chamber of commerce had raised sand about the issue and the exemption language had been omitted from the draft ordinance. There is a long history of such language being included in Los Angeles dating back to when the city passed one of the first living wage provisions in the country for city-based contractors years ago. The language then had included collective bargaining agreements as well as a provision allowing a lower hourly wage if offset by inclusion of health protection for the workers. The language was less controversial there and in some other cities that followed the LA leader because it introduced a level of flexibility and a voice for workers to increase their level of choice.

The Wall Street Journal did a back of the envelope survey of cities that had passed new measures above state or federal minimums. The language for an exemption does not exist in Seattle, Kansas City, Oakland, Louisville, San Jose, or New Orleans, though such carve-outs do exist in San Francisco and Chicago. In Washington there is language encouraging collective bargaining to exceed the new city minimums. In the San Jose language there is no real carve-out, but something closer to a severability clause that anything can be changed “to the extent required by federal law,” which is pretty much standard in all agreements.

The Los Angeles Federation of Labor and the national hotel workers’ union both argue that these carve-outs are needed to avoid unnecessary and frivolous court challenges, but that sounds more like a rationale than a reason. The same severability clauses in most collective bargaining agreements keep the contracts whole and intact based on the actions of any competent jurisdiction, federal, state or local or court actions. The notion that a company would sue the city to hold down its wages or protect its agreement seems a bit specious.

The claim by opponents is that this is an advantage in union organizing, but if it is, unions have never proven it to be. The pure and simple truth is workers almost uniformly grab the maximum in hourly wages come hell or high water, because they want the flexibility in spending and in bargaining the union, wisely, gets of the way and tries to add any increase in benefits on top of the wages.

I’m reminded of a big mistake I made while working as Chief Organizer of ACORN through inattention and failing to look at the forest for the trees in a similar matter many years ago. Somehow I greenlighted a lawsuit by our eager beaver, first amendment, free speech expert lawyers and their minders, challenging whether or not by the nature of our work at ACORN we should have untrammeled rights to associate and speak and therefore should not be subject to the minimum wage laws of California, despite having campaigned vigorously for such increases for all workers. My oversight had been perfunctory at best. We had a point, so, “sure, take a shot,” and away we went without thinking. For years our efforts to exempt the organization were thrown back in our faces in every living wage campaign. The lawyers had looked at the walls of the courtroom and stopped there. It was my job to look at the whole picture, and I didn’t. The optics were terrible regardless of whatever merits our position might have had.

This fight seems like a bad dream coming back. This is a fight we can’t win and should not wage, even if we thought there were real legal risks or organizing gains. We need to be seen as advocating for all workers. Period. We need to keep our victories untarnished. Heck, we need to learn from our mistakes!

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