On Thursday, the Service Employees International Union is planning protests advocating a $15 hourly minimum wage. The union claims that fast food, home care, and airport workers will go on strike in 160 cities, though it did not provide a list.
Regardless of whether a $15 minimum wage occurred at the local, state, or federal level, it is unlikely the minimum wage hike would actually help the group intended: low-skilled workers.
In February, the Congressional Budget Office released a report on the effects of hypothetical federal minimum wage increases to $9 an hour and $10.10 an hour. Their calculations roughly estimated that a $9 minimum wage would kill 100,000 jobs. A $10.10 federal minimum wage, a 40 percent increase from today’s $7.25 minimum wage, would kill 500,000 jobs. More than doubling the minimum wage to $15 would likely kill many more.
Still, the CBO estimated that millions of workers would see an increase in earnings as a result of the minimum wage increase. But the CBO’s calculation did not account for changes in benefits or hours worked. Employers could reduce fringe benefits and the total working hours of their employees to offset the mandated rise in employer expenses. Such reductions might mean the level of total compensation would fall as a result of the minimum wage increase, in spite of the CBO’s findings.
On Tuesday, the SEIU blog ran a piece by Abera Siyoum, who wrote that he has to work two jobs with no days off to support his kids. “My fight is not so different from the fight of fast food workers and so many other working people in America right now,” wrote Siyoum.
It is admirable that Siyoum works so much to provide for his family, but most Americans are not like him. If Siyoum works nine hours a day, seven days a week, he is similar to .3 percent of American minimum wage workers that work more than 60 hours a week. Just 2 percent of America’s 3.3 million minimum wage workers work more than 40 hours a week. Siyoum is an airport worker, but only 1 percent of hourly workers in the transportation industry earn at or below the minimum wage.
Research by David Neumark, of the University of California at Irvine, and William Wascher, of the Federal Reserve Board, has shown for years that the minimum wage reduces employment. Neumark and Wascher’s most recent paper, published with J.M. Ian Salas of Harvard, critiqued research showing no unemployment effects from the minimum wage. The paper concluded that the minimum wage kills jobs for very low-skilled workers.
Why are unions organizing protests for non-unionized workplaces anyway? If fast food companies give in and allow unionization of their employees, unions stand to gain millions of dollars. The high turnover in fast food jobs means that unions will have not just a constant stream of dues collections, but also in new initiation fees and strike fees. The fees are typically collected when an employee starts a unionized job and not returned when the employee leaves the union.
A minimum wage hike to $15 an hour would drastically harm low-skilled workers. Those that manage to escape layoffs may still find themselves earning less than they did previously. Newly-unemployed low-skilled workers would be robbed of the opportunity to gain work experience and climb the career ladder into the middle class. If fast food strikers get the $15 minimum wage they want, they may end up regretting it.
