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Crony Capitalism Watch
The Minimum Wage Con

If you thought that the union-backed #FightFor15 movement was really about making sure that all workers earned a living wage—rather than about using the government to enrich progressive interest groups—think again. The Guardian:

Los Angeles city council will hear a proposal on Tuesday to exempt union members from a $15 an hour minimum wage that the unions themselves have spent years fighting for.

The proposal for the exemption was first introduced last year, after the Los Angeles city council passed a bill that would see the city’s minimum wage increase to $15 by 2020. After drawing criticism last year, the proposed amendment was put on hold but is now up for consideration once again.

As it turns out, this practice is not uncommon. The WSJ reported last year that at least six municipalities have created special minimum wage carveouts for unions. The logic is straightforward: Kill non-unionized jobs, add more workers to the union rolls, and extract higher fees for union bosses. It’s not a minimum wage hike the labor movement is after, exactly: It’s a penalty on non-union employers, and a payout for modern-day Jimmy Hoffas. Expect unions in California and New York, which recently enacted statewide $15 minimums, to start lobbying legislators for their own sweetheart deals in the near future.

Of course, one can be charitable and note that these measures are backed, in many cases, by well-meaning people trying desperately to keep private sector unions viable in an age of globalization and rapid technological change. But that is no excuse for the kind of craven crony capitalism that’s now underway. If union leaders are going to ask for exemptions to their own laws, the least they can do is drop the pretense that a $15 minimum is a human right, and instead admit that they are in it—at least in part—to increase their own wealth and political power. But then, that would pour cold water on what they have managed to pitch to voters as a righteous moral crusade.

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  • Andrew Allison

    Let’s not pretend that all workers can EARN a living wage. Surely it’s clear that employers in the private sector can’t pay workers more than they earn .

  • Fat_Man

    The minimum wage continues to be zero.

  • dwk67

    Every penny they raise the minimum wage to is merely further incentive for employers to pursue automation to the fullest extent possible and, ultimately, put more people out of work. Let’s face it, native born American workers are all too often lazy, immature, and irresponsible employees. Our nation’s success has deluded us into thinking entry level jobs and hard physical labor are for suckers or immigrants only. We insist on a good paying lifetime job from the get-go and would rather remain unemployed, and bitch incessantly about it, than start at the bottom, gain experience, and build a resume. I say this as a unionized state healthcare worker who is often disgusted at the work ethic, or lack thereof, of a majority of my coworkers who are clueless at just how fortunate they are to receive the pay and benefits they currently enjoy. Sadly, the American worker of today has far more in common with a petulant spoiled child, than a humble individual who is trying to contribute to society, and a comeuppance for be forthcoming soon for all of us as a result….

    • CosmotKat

      According to most union contracts when the minimum wage is raised the contracts stipulate their pay be raised in line with the percentage of the M.W. increase. There are multiple level of hypocrisy at play in this scam.

  • alanstorm

    “Of course, one can be charitable and note that these measures are
    backed, in many cases, by well-meaning people trying desperately to keep
    private sector unions viable in an age of globalization and rapid
    technological change.”

    One could indeed be charitable in that manner, if one were dumber than dirt.

    • dawnsblood

      Nope. A lot of the folks that back these things are well-meaning. I know quite a few. The other thing true about those folks is that they either never took an economics course or learned nothing in it. So you can probably aim the ‘dumber than dirt’ label at those people if you like.

      • http://whenfallsthecoliseum.com/author/kwatson/ megapotamus

        Their intent is immaterial. Their effect is cataclysmic. But… it falls mostly on Democrats so there is mitigation.

        • dawnsblood

          I agree. I just felt the need to toss my two cents in on what the poster I was replying to said. Friedman was right that the true minimum wage is 0. Unfortunately a lot of people think they are doing poorer folks a favor by getting them replaced by automation.

  • klgmac

    In the end, unions haven’t protected workers pay, benefits, pensions or jobs.

    • http://whenfallsthecoliseum.com/author/kwatson/ megapotamus

      Except their own.

      • Fifty Ville

        It’s good to be the king.

        • http://whenfallsthecoliseum.com/author/kwatson/ megapotamus

          Harsh.

  • http://whenfallsthecoliseum.com/author/kwatson/ megapotamus

    Unions are just another layer of bosses that take their cut, contribute nothing and know less than nothing about the enterprise.

  • CosmotKat

    I can find some sympathy for private sector Union workers even though I am anti-Union, but I have none for public unions or their workers. They are stealing from the tax payer and Democrat politicians rely on them to keep themselves in powerful positions and to agitate for policies they favor while giving public employees a job for life and extravagant benefits all off the backs of tax payers.

  • Jim__L

    Two policies would help far more than any minimum wage efforts…

    – Prioritize Expansive Innovation — innovations that allow new types of services, and new types of jobs — over Disruptive Innovation, which puts a lot of people out of work. The early automobile industry (think, Henry Ford) was Expansive. Amazon and Uber are Disruptive, destroying jobs without creating good ones.

    – Incentivize job growth in areas were the basics of life (especially housing) have no scarcity premium on them. This will increase quality of life greatly, especially for families and children. There’s a huge amount of space in the USA to make this happen; this resource makes us dramatically different than Europe, which means our solutions will be dramatically different from Europe.

  • Misanthrope

    Labor unions have two, and only two, purposes:
    To eliminate competition in the labor market; and to enrich organized crime.

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