The drum beat from the left for the past couple of weeks has been about raising the minimum wage. Is this an altruistic endeavor meant to care for the working poor? Hardly. This isn’t about the working poor or American families. Raising the minimum wage is about paying back unions. You might say that this doesn’t make sense – the average union worker makes $22 per hour, not the minimum wage. How could this be?
It was radio host Mike Rosen who first alerted us to this situation via his Facebook page, where he posted the following:
Labor unions are big supporters of minimum wage hikes. Why? Because many of their contracts are indexed to the minimum wage. Here’s an example: Assume a union welder makes $30 an hour. This is $62,400 per year. Now assume Obama is successful in increasing the minimum wage from $7.25 an hour to $10.10 an hour. The union welder will get a 39% salary increase and suddenly he’ll be making $87,000 per year! Not bad, huh?
Wouldn’t it be nice to get a 39% salary increase…just because? But, he’s not the only one who has highlighted this issue. Nearly one year ago, a Wall Street Journal op-ed penned by Richard Berman from the Center for Union Facts also explained how this works.
The labor contracts that we examined used a variety of methods to trigger the increases. The two most popular formulas were setting baseline union wages as a percentage above the state or federal minimum wage or mandating a ﬂat wage premium above the minimum wage.
Other union contracts stipulate that, following a minimum-wage increase, the union and the employer reopen wage talks. The negotiations could pressure employers and unions to hammer out a new contract, regardless of how long their existing contracts last.
Of course, some union dues are based on a percentage of workers’ wages. So, when the minimum wage increases 39%, and union members receive a 39% wage increase, that means that the unions receive more in dues to pay their fat cat executives at the expense of their workers.
We aren’t arguing that workers deserve to be paid what they’re worth. And, wages have suffered due to the disastrous policies enacted by Democrats, but giving unions a handout when businesses haven’t recovered harms the economy and Colorado’s families.