A picture of minimum wage hike demonstrators accompanying an Investor's Business Daily story shows a placard that reads: "Raise Wages, Not Tuition."
The underlying assumption seems to be that wages and costs are arbitrary and dependent on government fiat, not economic realities or the initiative of individual employees. IBD notes:
We’re all happy when struggling people make more money. That usually comes, however, by working hard, learning a job well and becoming an asset to your company or business, which then pays you more because you’re worth it — not because government forces your employer to raise your pay to a preset level.
Of course, as the editorial makes clear, it is easy to understand the appeal of a minimum wage hike. What many fail to grasp, however, is that if wages are set too high, many people will lose their jobs altogether and others will be denied the entry level job that starts the ball rolling. The bar can be set so high that employers will not take on workers new to the workforce.
While many ordinary people will ultimately suffer from unrealistic wage hikes, one group won't suffer: union leaders. In fact, as IBD explains, these people, who will be untouched by unintended consequences, are leading proponents of the $15 wage hike. There is a sneaky reason:
The Los Angeles Times recently described how Bill Martinez, a 53-year-old bellhop at the Sheraton Universal in Studio City, was thrilled when he heard the city council voted to raise the minimum wage at big hotels like the one he worked at. That would have boosted his hourly pay 71%.
Oops. The law in fact lets unionized hotels avoid the minimum. So even though Martinez pays $56.50 a month in dues to the union, he won’t get the raise. “That’s what really makes me mad,” he said.
But non-unionized hotels will have to pay the higher wage. So unionized hotels will now have a cost advantage. In short, the unions used minimum wage workers to generate more business for themselves. Please remember that the next time you hear some union spokesperson blabbing about “the working man.”
Nor is this an isolated case. In the national Fight for 15 movement, the Service Employees International Union has reportedly spent $70 million to raise the minimum wage. Why? They’re losing members fast. But if they can raise the cost to others of employing workers, they stand a good chance of protecting their own members’ jobs — and the millions in union dues they rake in each year.
“When the public realizes both the extent of … job losses and sees more clearly who wins and who loses from this policy, I suspect the union bosses who funded this fight will face a fierce backlash,” wrote economic analyst Jeffrey Dorfman in a recent Forbes piece.
Americans should wake up. Many people will lose their jobs with a massive minimum wage hike. Unfortunately, union leaders won’t be among them.
And you thought only Democratic politicians benefited from the $15 minimum wage hike . . .