Free Markets, Free People

living wage


What good is a union if it can’t deliver the goods?

That’s kind of the $64,000 dollar question (yes, I’m showing my age … bite me) isn’t it?

You’ve seen the news about the fast food walkouts and claims that food service people should be paid $15 an hour?  That what the United Food and Commercial Workers union claims workers in that industry should have.  But what do workers they actually represent in that industry actually get?  Not much over minimum wage and union dues to pay out of that:

An examination of UFCW contracts shows that even senior union members are not receiving the wages that ROC and Jobs for Justice demand.

Consider a department manager at Kroger’s union shop in Michigan. She earns a maximum rate of $13.80, even after over half a decade on the job. If this is the highest wage the UFCW can negotiate for skilled, experienced workers, how can the union provide entry-level, low-skilled workers with $15 an hour?

It is not possible for them to accomplish this. Yet, receiving media coverage for the protests they sponsor is an effective way to increase membership and dues collections. The wage they demand is more than twice what similarly skilled union members are paid, namely $7.40 an hour for an entry-level cashier.

Courtesy clerks are paid a starting rate of $7.40 an hour and can work their way to up a wage ceiling of $7.45, after 12 months on the job. Fuel clerks do not fare much better; they start at the same $7.40 and can earn $7.80 an hour after three years of experience, barely over half of the $15 an hour wage worker centers supported by the UFCW demand. Specialty clerks also start at $7.40 an hour, but can earn up to $9.35 after six years. This amount is still 25 percent below the $12.50 an hour “living wage” Jobs for Justice claims all entry level workers should be paid. Read the full union contract between Kroger and the UFCW here.

The take-home pay is even lower once dues—and federal and state taxes—are removed. Dues are mandatory and usually take between $19 and $60 a month from members’ paychecks.

A non-union member could negotiate that without even trying hard.  So, what good is the union really done for those those it represents?  Other than pay it’s union staff very well?

It is expensive to run a union. The average total compensation for those employed by the UFCW—rather than represented by the UFCW—is $88,224 a year. This income is almost six times what the union negotiated for cashiers at Kroger’s. Joseph Hansen, the International President of UFCW, earns in excess of $350,000 a year—over twenty times the earnings of many of the workers he represents. The Executive Vice President and National President both earn over $300,000. Are entry-level union workers receiving benefits from paying dues out of their $7.40 an hour paychecks to fund these salaries?

But you know, it’s “management” that’s the problem, right?  I mean how could a cashier negotiate a $7.40 an hour paycheck without the union – and then give the union its “dues” out of that same paycheck?  Hey, the president of the union has to have his perks, right?

I know, I know, don’t look at the paycheck, look at the other benefits … like a pension, right?

The UFCW has one of the worst records for funding of union pension plans. The Labor Department has informed the UFCW that nine of its pension plans have reached “critical status,” meaning they are less than 65 percent funded. Many of these funds have been underfunded for six years. They have low chances of regaining sustainable financing unless they can convince more new members to join and pay dues without receiving similar benefits.

Sigh.

And, of course, there’s the political side of things … it is important to help fund the union’s political activities, no?

Some portion of dues goes towards political contributions. The UFCW contributed $11.6 million during the 2012 election cycle, of which nearly 100 percent went to Democrats.

Well of course it went to Democrats.  Democrats have been in the union’s pocket (and vice versa) since time began, apparently.  Put $11.6 in the pension fund?  What are you, a Republican?

Yes, it’s a crying shame people aren’t represented by this union … said no libertarian, ever.

~McQ


Arrogance and ignorance on display on D.C. City Council

What they’ve done is pretty typical of liberal governments everywhere.  They are arrogant with their power and totally ignorant of the economic impact their decision will have on the city.  But boy did they strike out at big box stores and do they feel good about it:

D.C. lawmakers gave final approval Wednesday to a bill requiring some large retailers to pay their employees a 50 percent premium over the city’s minimum wage, a day after Wal-Mart warned that the law would jeopardize its plans in the city.

That’s right, the hated Wal-Mart must pay more because retailers with corporate sales of $1 billion or more and operating in spaces 75,000 square feet or larger will be required to pay employees no less than $12.50 an hour.

No arbitrary or capriciousness there, huh?  Not a discriminatory law at all.  And who cares, right, because as one of the council members says:

“The question here is a living wage; it’s not whether Wal-Mart comes or stays,” said council member Vincent B. Orange (D-At Large), a lead backer of the legislation, who added that the city did not need to kowtow to threats. “We’re at a point where we don’t need retailers. Retailers need us.”

Yeah, retailers need them.

Really?  That’s what he thinks.  What if retailers decide they don’t need them?  Not only do the goods go away, but so do the jobs.  So $12.50 times zero gives you what?  It gives you this:

“Nothing has changed from our perspective,” Wal-Mart spokesman Steven Restivo said in a statement after the vote, reiterating that the company will abandon plans for three unbuilt stores and “review the financial and legal implications” of not opening three others under construction.

So 6 stores and the jobs that go with them … poof, gone.  Oh, and this is gone as well:

Well before it had any solid plans to open stores in the District, Wal-Mart joined the D.C. Chamber of Commerce and began making inroads with politicians, community groups and local charities that work on anti-hunger initiatives.

The campaign was matched with cash. Through its charitable foundation, Wal-Mart made $3.8 million in donations last year to city organizations including D.C. Central Kitchen and the Capitol Area Food Bank, according to a company spokesman.

Yeah, there you go.  That’s worth it isn’t it?  6 x no jobs and about $4 million in charitable contributions to help those in need in the area … gone.  Just to make a political statement and display for all their insufferable arrogance and their economic ignorance.

Of course, all of these unintended consequences will likely go unnoticed by the usual suspects while they cheer the council slapping Wal-Mart around.

~McQ

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