SEIU Spending Big on Fight for $15

Why has the Service Employee International Union (SEIU) spent at least $19 million last year and $90 million since 2012 financing the Fight for 15 when nearly all union members earn more than the minimum wage?

In most respects, the Fight for $15 minimum wage campaign has been a failure. Despite loads of union cash, the Fight for 15 has not achieved its policy goal of a $15 minimum wage and failed to organize fast-food restaurants.

If you read the SEIU’s press clippings, it supports a $15 minimum wage because it is a way to lift low wage workers out of poverty. But an abundance of research on the effects of minimum wages on low-skill workers shows it reduces employment.

Since raising the minimum wage is not the best option to pull individuals out of poverty, why does SEIU expend so much of its members’ dues on funding the Fight for $15? It is out of self-interest.

Minimum wage laws benefit union interests in one of two ways.

First, many state and local wage laws exempt union contracts from the new, higher wage standard. These exemptions make non-union labor more expensive, thus making union labor more competitive and companies less resistant to union organizing campaigns.

Labor organizations have caught considerable blowback from such union carve-outs in the past. In 2016, Los Angeles raised hotel workers’ minimum wage to $15.37, but exempted unionized companies from the wage hike. SEIU was a major proponent of the initiative.

While SEIU may have been pleased with the union exemption, not all union members were. Alicia Yale, a union member who worked at the Sheraton Universal hotel, gave her thoughts on the union loophole to The Los Angeles Times:

“Why is it more of a benefit to be in a union? The union isn’t really doing anything for us,” she said. “It’s completely upside-down. They want to pay us less than the minimum wage.”

Second, many collective bargaining agreements tie union members’ wages to increases in the minimum wage. When the minimum wage rises so do union member wages (see collective bargaining agreement examples here).

In many instances, raising the minimum wage to $15 per hour would make low-skilled workers unemployable. In recent research, the Heritage Foundation finds that enacting a national $15 minimum wage would result in the loss of 7 million jobs.