Why Unions Support Minimum Wage Hikes

May 9, 2014

Unions stand to see wage increases if the federal minimum wage rises to $10.10 per hour, according to a report from Townhall.

President Obama is urging a minimum wage increase on the grounds that "our economy works best when it works for all of us -- not just a fortunate few." But as research indicates, a wage increase would hurt the economy and destroy jobs:

  • A recent report from The Lucas Group found that one-third of small and medium-sized businesses would see their hiring plans negatively affected by the 40 percent wage increase. Consumers would also be impacted by rising prices.
  • According to the Wall Street Journal, almost 40 percent of businesses would have to fire employees if the minimum wage is raised to $10.10 per hour.
  • The Congressional Budget Office reports that up to 1 million jobs could be lost if the minimum wage increase passes.

But who would gain from the wage hike? Unions. Unions already make substantially more than the current minimum wage, but many union contracts set baseline union wages at a certain percentage above the minimum wage. Therefore, if the federal minimum wage is increased, union wages would also increase.

Higher union wages also mean higher dues. While businesses are forced to slow down hiring and lay off workers when the minimum wage rises, unions see more money and their workers receive higher wages.

Source: Fred Wszolek, "The Real Reason Big Labor Wants a Minimum Wage Hike," Townhall.com, May 6, 2014.

 

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