LA’s labor unions want an exemption from the city’s new $15-an-hour minimum wage

The Los Angeles City Council recently passed a bill to hike its minimum wage to $15 an hour, a change strongly supported by Southern California labor unions. Except now the unions want a last-minute change in the bill — an exemption for unionized firms, which would be allowed to pay less than $15 an hour if a collective bargaining agreement calls for it.

This notion has been met with near-universal derision from both left:

And right:

The push for the exemption will very possibly collapse amid public backlash, and it could undermine the larger Fight for $15 movement, which is heavily backed, funded, and organized by labor unions.

But even though it sounds somewhat absurd to American ears, if you look at something like a world map of minimum wages you can see the logic of it.

Specifically if you glance up at Northern Europe, you’ll see that some of the most famously economically progressive countries in the world have no statutory minimum wage. That’s not because they practice neoliberal-style infinitely flexible labor markets. It’s because they have extremely strong cultures of collective bargaining.

In Denmark, about 80 percent of workers are covered by collective bargaining agreements. In Sweden and Finland, it’s more like 90 percent. And the non-covered workers are generally managers and business owners for whom low wages aren’t really an issue. The idea is that this kind of collaborative wage setting achieves the flexibility goals of a low minimum wage and the fairness goals of a high one. Meanwhile, minimum wages are a relatively new arrival in places like the United Kingdom and Germany, where once-mighty cultures of unionization and collective bargaining have eroded somewhat.

The dissonance in the American case is that while we have long had labor unions, they are very much a niche force in the private sector economy. They’re not nearly strong enough to replace labor market regulation, which is precisely why unions are often political advocates for regulation to complement their bargaining work. Then when they turn around and suggest Nordic-style flexibility inside the context of a collective bargain, it looks like pure opportunism. And, obviously, like everything in politics, there is some opportunism present. But the basic notion is that a work agreement reached through a collective bargaining process should be judged presumptively fair and non-exploitative in a way that isn’t true for individual bargaining alone. That’s obviously not an idea everyone accepts. But it’s very close to the core of what labor unions are all about, so you can see why they would embrace its application in this instance.

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