At Work

The Union Minimum Wage Windfall

I have written several times about the wage compression issue related to a $15.00 minimum wage, but I must admit I missed the most obvious impact on union wages; a windfall for many union workers already earning above the current or even proposed minimum.

In addition, some union contracts are linked to the minimum wage stating the hourly rate is a multiple of the minimum. This is an automatic raise for many people already earning what politicians like to call a living wage. 

Clearly there is nothing wrong with rising incomes, but that should be linked to productivity, economic growth, increased labor demand and growing skill levels which is quite different from government edicts rippling through the economy. To make matters worse we have states and cities doing their own thing with wages further distorting the markets. 

Mario Cilento, president of the New York state AFL-CIO, was even more explicit when his state passed a $15 minimum-wage requirement in April, the Bee reported: “Those of you making 16 or 17 or 18 dollars an hour, the next time your union goes in to negotiate, they’re going to ask for 19 and 20 and 21 dollars and up!”

Source: The Union Minimum Wage Windfall – WSJ

Let’s hope we know what we are doing or we will become the victims of our own high minded sounding rhetoric. 

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Categories: At Work, Politics

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