This November, San Francisco could become the next city on the West Coast to enact a dramatic hike in its minimum wage, despite a report by the city controller that states that the proposal would cut more than 15,000 jobs. In local elections, San Franciscans will vote on a measure that would increase the city's minimum wage from $10.74 per hour to $12.25 in May, then incrementally higher until it reaches $15 per hour in 2018.
The minimum-wage cause has been taken up with varying degrees of success in a number of cities since President Barack Obama's push to get Congress to raise the federal minimum wage spluttered earlier this year. Seattle's City Council recently approved a wage increase, which was immediately challenged in federal court. Efforts to raise the minimum wage are active in other California cities as well. The San Diego City Council passed a measure to increase its wage, but faces a veto threat from the mayor. A similar campaign is underway in Los Angeles.
A common denominator in these efforts across the country: Big Labor bosses. Whether they're on the front lines or working through shadowy front groups, union bosses are some of the loudest voices demanding minimum wage hikes. And their reasons for doing so are as cynical as they are self-serving. At the root of it, of course, is the almighty dollar.
Though union workers usually earn considerably more than minimum wage to begin with, union wages are often contractually pegged to the minimum wage — if the minimum wage increases, then so must the union wage. Union workers make more money, which means labor bosses receive more union dues. It stands to reason that labor organizations are worried about running out of money: union membership is at an all-time low, standing at barely more than 11 percent of American workers last year.
Much of the money that union bosses do have, however, is spent on political activities, and flows especially freely to politicians like those in these cities that are pushing minimum-wage measures. In San Francisco, the Service Employees International Union agitated for an even faster hike in The City's minimum wage — up to $15 by 2017. This was abandoned, however, after striking a deal with their allies in city government.
The problem, of course, is that this dramatic wage increase will only cause problems for average San Franciscans — especially anyone who works at, owns or visits a restaurant. Most strikingly, the City Controller's Office of Economic Analysis reported last month that the plan would kill around 15,270 jobs in The City. Restaurant workers make up a significant portion of these losses and local restaurateurs are warning that this won't be the only cost — consumers could face higher prices as well.
Food services are certainly not the only San Francisco industry to be negatively impacted. The city controller notes that job losses would be “distributed across the city's economy.”
“To the extent that higher minimum wage raises labor costs,” the report states, “it will create a disincentive to hire employees and would lead to reduced employment within the city. This will tend to contract the city's economy.”
There it is in black and white, under city government letterhead. And yet Mayor Ed Lee and the Board of Supervisors sided with Big Labor bosses over their own city's workers. Lee said he is supporting this measure to “help our lowest-paid workers” — but exactly which workers will be helped by cutting over 15,000 jobs?
Fred Wszolek is a spokesman for the Workforce Fairness Institute.