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Major labor union behind push for $15 minimum

Note: this is a reprint of August 12 2016, Washington Examiner Article. The original article can be found here.

Advocates for a $15 federal minimum wage will be holding a major rally in Richmond on Saturday, culminating in a march to the Virginia capitol. Mary Kay Henry, president of the Service Employees International Union, will kick off the event with a speech Friday.

SEIU isn't just a supporter of the cause. It is largely the reason why the $15 minimum wage movement is on the national agenda. While the movement has presented itself as a spontaneous uprising of disgruntled workers, SEIU was funding and stage-managing the movement from the start. Unions have long backed high minimum wages laws because they make low-wage nonunion workers less economically competitive against unionized ones.

Federal filings with the Labor Department show that SEIU gave $5 million in 2015 and $3.8 million in 2014 to the Fast Food Workers Committee, the organization that runs Fight for $15, the activist group pushing the issue. The SEIU connection is not mentioned on Fight for $15 's website, but press releases by the organization have identified Kendall Fells as its president. A Kendall Fells is also listed on the SEIU's filing under "disbursements for employees" as a city coordinator with a salary of $150,000.

Other key people running the $15 movement are also SEIU officials. In a candid speech at a forum hosted by the Economic Policy Institute in July, SEIU Local 775 President David Rolf talked at length about how the union began the movement. Rolf was a key figure in the movement to get Seattle-Tacoma to adopt a $15 rate in 2014, which boosted similar efforts in other cities and states.

SEIU's efforts began in 2012 with a series of strikes it organized with fast-food workers in New York City, Rolf said.

"It was one of three pilot [programs] that we were testing in SEIU about strikes for dramatically better wages," he told the audience at the liberal Washington think tank. The other two programs SEIU ran involved retail workers in Chicago and coffee shop workers in Seattle. Neither of those were successful but the New York one got some traction — an estimated 200 fast food workers walked off their jobs — so the union focused its energies on that sector.

"Nationally we decided to resource this fight for $15 in the fast food sector to start with," Rolf said.

These weren't traditional labor strikes, Rolf noted. The economic impact on the businesses was negligible and none was forced to the bargaining table.

Rather, it was a "reputational strike" — that is, a blow against the companies' public image. "It created a huge amount of media coverage," Rolf said. A similar small-scale strike at a Taco Bell in Seattle, involving just three workers, kicked off similar media coverage there.

While businesses were unmoved, the coverage made the issue hot among liberal city and state-level politicians. Seattle passed its increase, as did San Francisco and Los Angeles, with the movement growing from there.

SEIU and other unions backing the effort had a plan: The increases in Seattle, Los Angeles, San Francisco, Long Beach, San Jose, Richmond and Oakland, Calif., as well as Milwaukee County, Wis., all included exceptions for businesses that had collective bargaining agreements. In other words, unionized workers could legally be paid less than the new minimum wage.

In each case, the minimum wage push was largely backed by organized labor acting through grassroots groups and liberal coalitions.

That created a tremendous incentive for businesses to sign collective bargaining agreements with unions as a way to reduce their labor costs. It would be a bad deal for the newly organized workers, who could not only find themselves getting paid below the minimum but have to pony up union dues on top of that.

Rolf admitted in a 2013 Seattle radio interview that the move was an incentive to get employers and business groups to drop their opposition to a high minimum wage. "We always want to offer an olive branch and a high road approach to employers of conscience who would prefer to have direct and honest dealings across the bargaining table with a union that their employees vote for," he said.

Reports of the exceptions gave the movement bad publicity, however. After a union exception became a contentious issue in 2015 when Los Angeles County officials were considering a $15 rate, non-union minimum wage activists pushed back and it was dropped. Minimum wage activists have largely avoided the issue since then. The official 2016 Democratic Party platform language calling for a $15 national minimum includes no exceptions.

That ironically presents a problem for labor since higher wages are one of the main supposed advantages of being a union. A wage as high as $15 with no exceptions can actually make unions less attractive to workers because they would have little need for them. By pushing a $15 federal wage, the unions may ultimately be hurting themselves.

Rolf conceded that in his talk at the Economic Policy Institute. "How do you build a sustainable organization by giving away your core product for free? That is the problem that the union movement has," he said.

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