Here’s another lesson in The Law of Unintended Consequences that unions should know all-too-well: Artificially-higher wages can and often does lead to unemployment.
The Service Employees International Union (SEIU) is spending tens of millions of dues dollars on its nearly six-year old plan to unionize the fast-food industry.
As it stated in its 2009 blueprint, the SEIU has framed its campaign around a fight for higher wages (or “living wages” as Leftists like to call them) to “build excitement.”
If the union’s campaign to unionize fast-food workers is successful, the SEIU’s return on investment (ROI) would be huge as it stands to rake in billions in union dues.
However, the union’s gamble may take a long time to payoff–if it ever does–as the fast-food industry begins to move more toward robots as a viable alternative to a unionized workforce.
In the meantime, though, while the union has failed to get any fast-food companies to a bargaining table, the union is spreading its campaign to other industries and trying to turn higher wages into a modern-day civil rights issue.
In addition, the SEIU and its fellow socialists have won higher wages in a few notable public arenas. Those wins, however, have resulted in some unfortunate consequences.
It seems that the expected benefits of higher wages that many might have thought would be reaped are, instead, coming at a hefty price. In a number of cases, that hefty price is the very jobs of the workers that the union is purportedly trying to help.
[Soon-to-be unemployed pizza maker Devin Jeran] wonders about all the rallies that were supposed to be about making life better for people like him.
“If that’s the truth, I don’t think that’s very apparent. People like me are finding themselves in a tougher situation than ever.”
Last year, the SEIU and its allies successfully lobbied Barack Obama to issue an executive order that mandates federal contractors to increase the minimum wage for employees to $10.10 per hour (without increasing prices).
Despite a hoped-for exemption for fast-food retailers, the Obama Administration pushed forward with the wage increase.
According to the Army Times, “[Department of Labor] officials contend that increasing the minimum wage will lower employee absenteeism and turnover, improve workforce morale and productivity, reduce supervisory costs and increase the quality of services provided.”
This is despite the fact that the deputy assistant secretary of the Navy for military manpower and personnel predicted by “up to 390 fast food concession operations would close on military installations across the U.S. and its territories, with a loss of nearly 5,750 jobs, many held by military family members and veterans.”
As a result of the increase, fast-food retailers have already begun closing their stores on bases.
Despite the evidence that workers are beginning to see the potentially-disastrous consequences of the SEIU’s actions, the entire union movement is now doubling down and using its push to increase wages as campaign ploy ahead of the 2016 elections.
There is little doubt that if the unions are successful in driving wages beyond reasonable market prices and workers continue to lose jobs, the unintended (and unfortunate) economic consequences will be blamed on someone else.
